Quality Chemical Industries Ltd (QCIL) has more than doubled dividend payout after reporting a strong profit growth for the year ended March 31, 2024 driven by antiretroviral and antimalarial drug sales.

The board has proposed $5.5 million dividend this year from $2.5 million last year.

For each share, the Uganda Securities Exchange-listed pharmaceutical company has proposed to pay Ush5.7 ($0.0015). The pharma’s profit after tax grew by 67.2 percent — the highest in the three years to March 31, 2024 — reaching Ush31.7 billion ($8.4 million) from Ush18.9 billion ($5 million) the previous year.

“The company is in growth phase and can be expected to reinvest in its operations and capacity expand its product portfolio and market presence to drive long-term value creation,” QCIL said in its financial statement published on May 13.

The biggest gainer in in the pay-out are the new investors Africa Capital Works SSA, a subsidiary of Capital Works Ltd, a US-based private equity firm, that bought 51.18 percent stake from Cipla India Ltd last year.

Other investors are TLG Capita Amistad of UK, the second-biggest shareholder, closely followed by SCB Mauritius, Government Employees Pension Fund and National Social Security Fund and individuals.

Quality Chemical Industries is the eighth most traded stock on the Uganda Securities Exchange over the past three months.

The value of the company has grown by $2.8 in the six months on the Ugandan bourse.

QCIL began the year with a share price of Ush52.50 ($0.014) and has since gained 4.76 percent, ranking 11th on the USE in terms of year-to-date performance.

The pharma’s CEO Aja Kumar Pal said a strong momentum was experienced in the company’s customer segment in the financial year ending March 31, 2024.

Orders from sovereign customers rose by Ush47.9 billion ($12.73 million), while those from institutional bodies grew by Ush6.4 billion ($1.7 million). Sales to the government of Uganda increased significantly, he said.

However, the company reported that contract manufacturing sharply declined, owing to softening demand from Cipla Ltd after the company shifted to sourcing products from a competitor.

Read: Cipla’s takeover by Capital Works stirs Uganda market

This is the third year the drug maker is reporting profits. In the financial year ended March 31, 2020, the company announced a loss of Ush36 billion ($9.5 million) mainly due to additional impairment allowance, drop in gross margins and increase in interest on overdraft.

CiplaQCIL had won a contract to supply Anti-retrovirals (ARVs), Anti-malarials (ACTs) and Hepatitis medicines manufactured in Uganda to the Ministry of Health Zambia for a period of 20 years, with reviews every five years.

Mr Pal reported that a one-off payment of the Zambia debt also lifted the company’s revenues with only $2.5 million pending payment.