Square Pharmaceuticals continued a growth in profit for the second quarter of the FY23 despite an increase in the prices of raw materials and other expenses.
A 14.09 per cent year-on-year revenue growth and non-operating income helped the company maintain a modest bottom line growth for Q2, FY23.
Its consolidated earnings per share (EPS) rose 10.37 per cent year-on-year to Tk 5.12 for the quarter ended in December 2022.
Md. Moniruzzaman, managing director of IDLC Investments, said the company's revenue growth was remarkable given the sheer size of it.
According to his analysis, the earnings grew at a slower pace than the revenue because of a slight dent in the gross margin and an increase in operating expenses.
The company's gross profit margin stood at 53 per cent in Q2, FY23, decreased from 53.4 per cent in Q2, FY22, "which suggests 40 basis points year-on-year dent and this is very insignificant," Moniruzzaman said.
The company's operating expenses as percentage of sales stood at 20.80 per cent in Q2, FY23 against 19.9 per cent in Q2, FY22, suggesting a deviation of around 90 basis points.
Overall operating profit margin stood at 32.76 per cent in Q2, FY23 against 33.76 per cent in Q2, FY22.
The operating expenses rose 19 per cent for the second quarter of the FY23, compared with the same quarter of the previous fiscal year.
Company's Chief Financial Officer (CFO) Muhammad Zahangir Alam said the operating expenses rose for many reasons including the hike in energy cost, salary and consumer bills.
Of the other income, a significant portion was generated as interest from deposits, bonds and dividends.
The company reported other income amounting to Tk 1.89 billion for the H1, FY23, which stood at Tk 925.56 million for Q2, FY23.
The company made a hefty profit from the foreign exchange gains in Q1, FY23 due to unprecedented fluctuation of forex rate during the period but the similar gain was not possible in Q2, FY23.
CFO Mr. Alam said the dollar' conversion rate jumped to Tk 100 from Tk 84 in Q1, FY23 but the rate was almost same in Q2, FY23.
The company reported foreign exchange gain of Tk 484.33 million for H1, FY23, a greater chunk of which was realized in Q1, FY23.
Mr. Alam said the company's market share rose as its revenue grew.
"At the moment, I am unable to speak about the market share as a third party works on it. The rise in market share will be visible in future," he said.
The consolidated net operating cash flow per share (NOCFPS) was Tk. 8.32 for H1, FY23 against Tk. 10.89 for H1, FY22.
The company's share price closed at Tk 212.60 each on November 28, 2022 and came down to the floor price of Tk 209.80 each the following day and remained unchanged until Tuesday.
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