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Square Pharma sees low profit, weighed down by higher operating expenses

FE REPORT | November 16, 2022 00:00:00

Square Pharmaceuticals' profit grew marginally at 9.93 per cent year-on-year for the first quarter of FY23, held low by a significant rise in operating expenses.

The company reported that its consolidated earnings per share rose slightly to Tk 6.20 for the Q1 from Tk 5.64 a year earlier.

After the disclosure, the stock went up a bit to Tk 211 on the Dhaka Stock Exchange on Tuesday. It closed at Tk 210.1 the day before.

The marginal price appreciation in the last two sessions helped close the trading above floor price.

During the quarter, the company's operating cash flow declined from what was in the same quarter last fiscal year.

Chief Financial Officer of Square Pharmaceuticals Md Zahangir Alam said the operating cash flow had fallen due to a hike in manufacturing costs and the prices of raw materials.

"The depreciation of local currency is another reason," he added.

Apart from the increased prices of packaging materials, the cost of manufacturing and the prices of raw materials went higher by around Tk 1.0 billion and Tk 800 million respectively.

"Nevertheless, Square Pharmaceuticals was able to report good profit in the first quarter of the fiscal 2023," Mr. Alam said.

The consolidated net operating cash flow per share was down more than 11 per cent to Tk 5.87 for the Q1 of the ongoing fiscal year, compared to the same quarter of the previous year.

At the same time, operating expenses jumped 18.51 per cent to around Tk 2.95 billion.

On September 18, the stock slid to the floor price of Tk 209.80 leading to shares being traded at the price for over a month until November 1.

The share price advanced in two sessions and closed at Tk 211.50 on November 3. It came down to the floor again on November 6.

The share price saw a slight appreciation over the last two sessions to close at Tk 211 each on Tuesday.

Square Pharmaceuticals, presently an 'A' category company, was listed with the stock exchange in 1995.

Sponsor-directors hold 34.67 per cent shares, institutes 15.03 per cent, foreigners 13.29 per cent and general investors 37.01 per cent, according to data available until the end of October this year.

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