Africa-Press – Cape verde. The net results of EMPROFAC (Empresa Nacional de Produtos Farmacêuticos) decreased by 137% compared to the previous year, mainly because of the destruction (burning of expired medicines) and adjustments in inventories, recorded in 2021. For the first time since 1979 , the company operates in the “red”. Covid-19 and mismanagement in the stock of medicines are among the reasons for this historic gap. The State, for a change, is EMPROFAC’s biggest debtor, not always paying its commitments on time.
EMPROFAC recorded negative net results for the first time since its creation in 1979.
The losses of this public company, which has a monopoly in the marketing of pharmaceutical products, amounted to 51 million escudos in 2021. However, the sales volume, in that same year, exceeded 2 billion escudos.
Disabling of medicines
The negative results of EMPROFAC were impacted by the destruction of medicines (which exceeded the expiration dates) in the order of 256 thousand escudos.
The company’s management points out several factors for this, with emphasis on the covid-19 pandemic. This, as our source says, “had a negative influence on sales of medicines, with a reduction of more than 15% compared to the previous year”.
Net results decreased by 137% compared to the previous year, mainly due to the destruction (burning of expired medicines) and adjustments to inventories, recorded in 2021.
As a result, the company’s equity decreased by 12.12%, compared to the previous year, due to the negative net result of 2021.
Current assets decreased by 27.4% due to the impact of the reduction in the value of inventories in warehouses in the amount of PTE 532 million and customer debts of around PTE 190 million, compared to the previous year.
According to the report, the item with the greatest weight in current assets is inventories, which represent 55% of current assets. Total assets amounted to around 2.4 billion escudos in 2021, against more than 3 billion escudos in 2020.
On the other hand, liabilities, as at 31 December, amounted to more than 1.3 billion escudos, of which 93% are current liabilities. The item with the highest total weight is that of suppliers with 53% of total liabilities.
Debts: State pays almost two years late
Unsurprisingly, the State is EMPROFAC’s biggest debtor. The balance of the company’s customer account recorded, at the end of 2021, a total debt of around one million escudos, against one million and 22 thousand escudos in 2020, that is, a reduction of 15%.
The average collection period for customers was 196 days in 2021, against 132 days in 2020, but, with reference to the public sector, the average collection period increased from 301 days in 2020 to 562 days in 2021.
Regarding debts with suppliers, EMPROFAC’s report and accounts highlights that, in 2021, there was “a significant reduction” in the current account balance of the main suppliers, being 35% in relative terms.
The company ended the year with a debt with suppliers in the amount of more than 704 million escudos, meaning a decrease of 375 million escudos in relation to the previous year.
The average payment period to suppliers increased from 150 days in 2020 to 220 days in 2021, and for the national supplier the average payment period was 163 days, against 113 in 2020.
Stock outages and overvalued masks
According to the EMPROFAC report and accounts, which the NATION had access to, in 2019 there were several situations of unavailability of certain medicines, especially antihypertensives, such as Nifedipine 20mg tablets, Valsartan, for reasons related to shortage of raw materials , batch collection due to various non-conformities, and export bans, affecting our main supply market, Portugal.
“As a reaction to the situations of stock outs, the company built up, at the time, stocks of these products higher than those that it normally had, taking into account the registered demand”, he emphasizes.
EMPROFAC’s poor financial performance in 2021 is justified by the beginning of the pandemic (2020). The company acquired a “large amount” of PPE (community masks, surgical masks and others), which are still in stock today.
“After carrying out a commercial analysis of these EMPROFAC equipments, we found that: average cost prices are much higher than sales prices in the Cape Verdean market. Currently, community masks have not been in demand, that is, consumers are opting for surgical masks purchased on commercial surfaces for an average value of 10$00 (EMPROFAC acquired national producers for 170$00 unit, according to Government decree); the KN95 masks, whose validity is the year 2023, are currently being sold by the company’s competition -81% of the average cost”, highlights the report and accounts.
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