Key Takeaways
- OTSU’s topline grew by 14.34 percent year-on-year to Rs.2546.28 million in 2021.
- Gross margin strengthened significantly, climbing from 26.90 percent to 33.20 percent in 2021.
- The company increased its production capacity for IV solutions and plastic ampoules.
Otsuka Pakistan Limited (PSX: OTSU), a public limited company incorporated in 1988, has reported year-on-year growth in its topline. According to the latest financial data, the company’s revenue increased by 14.34 percent from the previous year to Rs.2546.28 million in 2021.
The growth was primarily attributed to the sales of clinical nutritional products, which saw a significant boost during the period under review. The company also managed to optimize its sales mix by shifting focus towards these products, thereby enhancing overall margins and profitability.
In terms of production capacity, Otsuka Pakistan Limited has made notable strides. During 2021, it produced 20.3 million bottles of IV solutions and 14.6 million bottles of plastic ampoules, marking a capacity utilization rate of 64.6 percent and 69.5 percent respectively. The company further increased its production capacity to 31.4 million bottles of IV solutions and 21 million bottles of plastic ampoules as compared to the rated capacity until 2020.
Cost optimization measures, coupled with a stronger Pak Rupee, helped control cost of sales growth at only 4.51 percent year-on-year in 2021. This resulted in a significant improvement in gross profit, which increased by 41 percent to Rs.847.39 million, with the gross margin rising from 26.90 percent to 33.20 percent.
Despite challenges posed by the eruption of COVID-19, particularly on the medical devices business, Otsuka Pakistan Limited managed to adapt and maintain its financial performance through strategic product mix adjustments. The company introduced a new product, OTSUFLOX (Ciprofloxacin), during this period, contributing positively to other income.
Other income saw a substantial increase of 133.57 percent in 2021 due to favorable exchange rates and the recognition of significant exchange gains. Other expenses declined by 21.27 percent year-on-year as there were no exchange losses or provisions against doubtful debts during this period.
Operating profit surged by 170.93 percent, with operating margin increasing from 8 percent in 2020 to 19.18 percent in 2021. This improvement was driven by effective cost management and strategic product diversification.
