Medilines sets strategy to sustain long-term growth

Published December 2, 2021, 3:08 PM

by James A. Loyola

Medilines Distributors Incorporated, one of the leading distributors of quality medical equipment in the country, is charting a sustainable growth trajectory for the long term by focusing on resilient products.

“Crafting our product portfolio is at the heart of Medilines’ strategy that has brought us sustainable growth over the years,” Medilines Chairman Virgilio B. Villar said.

Medilines Distributors Inc. Chairman Virgilio B. Villar

He noted that, “We focus on products with resilient demand while building our capabilities to dominate certain markets rather than chasing a hot selling item that everybody else is selling.” Villar said this strategy provides stability in sales as their products remain critically necessary for patient care regardless of whether the pandemic prolongs.

Medilines is the largest distributor in the Philippines of cancer therapy equipment with over 90 percent market share and of dialysis machines with over 50 percent share according to an independent study conducted by research firm Ken Research Ltd.

Cancer and kidney illnesses are among the most prevalent diseases afflicting Filipinos. Medilines also distributes diagnostic imaging devices, such as CT scans, x-rays, and MRI’s.

Medilines, touted as the Philippines’ first pure-play healthcare IPO, is scheduled to list its common shares on the main board of the Philippine Stock Exchange on December 7, 2021.

“Amid the volatility, it is a welcome development for the Philippine stock market to finally have a pure-play healthcare listed company as the companies in this sector are typically considered as defensive stocks,” said PNB Capital and Investment Corporation President and CEO Gerry B. Valenciano.

He added that, “Demand for healthcare is seen to be resilient and less impacted by economic changes. We see growth to be driven by the changing demographic trends such as the ageing population and increasing awareness in the importance of healthcare.”

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Medilines has demonstrated a track record of growth at a higher rate than that of its industry attributing to the consistently growing demand for its products.

From 2018 to 2020, its topline grew at a compounded annual growth rate (CAGR) of 11.9 percent to just under Php1.5 billion, while net income grew at a CAGR of 16 percent to P103 million.

In 2021, its revenues for the six-month period ended June 30, 2021 jumped to P815 million while its net income was at P100 million.

Linear accelerators or LINACs, which contributed over 60 percent of the company’s sales in the first halof 2021, are used for the treatment of cancer, which is growing in incidences among Filipinos.

Medilines also disclosed that it has forayed into selling consumables to realize more value from its dominance of the sale of equipment, starting with its dialysis business.

“To sustain our growth in the dialysis category, we are transforming this business line into a one-stop-shop where our customers can buy not only the equipment but also their regular supply of consumables,” Villar explained.

He added that, “This will also help grow our bottom line as consumables tend to have higher profit margins versus equipment.” More recently, the diagnostic imaging devices and dialysis machines distributed by Medilines are in high demand for use in the diagnosis of COVID-19 and treatment of COVID-19 complications, respectively.

 
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