Leading drug maker Renata Limited has witnessed the lowest profit in the past seven years due to a combination of currency devaluation and a surge in raw material costs.
The company has reported a net profit of Tk 2.32 billion for the financial year ended on June 30, 2023, down 54.6 per cent from the net profit of Tk 5.11 billion for FY'22, although the drug maker had experienced a gradual rise in profits in the previous six years.
In a meeting held on Saturday, the company's board of directors has recommended 62.5 per cent cash dividend for FY'23, also the lowest in the past seven years.
Company secretary Md. Jubayer Alam said their company raised the Maximum Retail Price (MRP) for only 76 products, out of 671, even though production costs saw a significant increase during the reporting year.
Apart from a hike in raw materials, the rise in fuel price and currency devaluation contributed to the rise in production costs, he added.
During FY'23, the company experienced a hike of 20-25 per cent in the prices of raw materials.
"Coupled with increased usage, we have observed a 72 per cent increase in the cost of energy," Mr. Alam said, adding that the rise in distribution expenses also impacted the company's profit.
Renata's earnings per share (EPS) stood at Tk 20.21 for FY'23 as against Tk 44.56 a year before.
The net operating cash flow per share declined to Tk 17.75 for FY'23 from Tk 26.24 in the previous fiscal year.
Its net asset value (NAV) per share, however, rose to Tk 266.22 for FY'23 from Tk 256.44 in the previous fiscal year.
The company's share price, however, remained stuck at the floor price of Tk 1217.90 since November 13, 2022 on the Dhaka Stock Exchange (DSE).
The company's financial disclosure for FY'23 said the board of directors has decided to issue non-convertible preference shares worth Tk 3.5 billion to refinance the existing loans.
It also decided to issue zero coupon bonds worth Tk 5 billion to refinance the existing loans.
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