Pharma Aids rebounds on higher sales in FY24

Pharma Aids made a remarkable turnaround in FY24 after suffering a moderate loss in the previous year, riding on higher sales and increased selling prices.
The pioneer ampoules manufacturer reported a profit of Tk 61 million in FY24, as against a loss of Tk 6.4 million the year before.
Earnings per share (EPS) stood at Tk 19.61 for FY24, as opposed to a loss of Tk 2.05 per share a year ago, according to a stock exchange filing on Thursday.
Despite the profit, the company's stock plunged 9.31 per cent to Tk 615.5 per share on Thursday on the Dhaka Stock Exchange.
In its earnings note, the company said that apart from higher sales and an increase in selling prices it had put in efforts to minimize costs of raw materials.
Moreover, toll production contributed to a significant growth in sales in the year under review.
Pharma Aids is yet to disclose annual sales figures. However, its nine-month sales jumped 43 per cent year-on-year to Tk 331.47 million through March this year.
The company managed to offset costs partially by adjusting sales prices.
The cost of sales, which includes all associated costs to make the products, stood at Tk 223 million in the nine months to March this year, which was 67 per cent of the total sales, significantly down from 83 per cent in the same period last year.
The company will hold the annual general meeting on December 24 and the record date for entitlement of dividends is December 5.
Having started commercial operation in 1984, Pharma Aids is in manufacturing of glass ampoules for the pharmaceutical industry.
Currently, the company's production capacity is more than 0.45 million glass ampoules per day. The growing demand for glass ampoules prompted the company to go for toll manufacturing in October last year.
Toll manufacturing, also known as toll processing, is a type of contract manufacturing, in which the customer provides raw materials, formulas, and specifications to the manufacturer to make finished or semi-finished products.
Companies of the pharmaceutical sector have been increasingly engaging in toll or contract manufacturing as it creates a win-win situation for both parties.
Pharma Aids will pay Tk 2.5 per share to shareholders for FY24 from its earnings of Tk 19.61 per share.
At present, its total number of shares is 3.21 million, meaning the company will distribute only Tk 7.8 million in cash dividends against an income of more than Tk 61 million.
The company said the rest of the profit would be used for land acquisition and the upcoming BMRE (Balancing, Modernization, Rehabilitation and Expansion) project.
In May this year, Pharma Aids announced purchase of a land of 103 decimals at Kaliakoir in Gazipur with an investment of Tk 113.8 million for the construction of a manufacturing plant to expand production capacity.

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