Square Pharmaceuticals gained a 6.43 per cent year-on-year growth in profit to Tk 10.23 billion in July-December, FY24.
Its revenue was up 15 per cent year-on-year during the period but higher operating expenses and cost of goods sold narrowed the profit margin.
The drug maker veered off its growth trajectory in the second quarter of FY24 for a significant rise in the cost of goods sold and operating expenses. It experienced a 0.39 per cent year-on-year decline in profit in October-December last year.
The cost of goods sold and operating expenses advanced 24 per cent and 20 per cent respectively in Q2, FY24.
During the six months through December, the cost of goods jumped 18 per cent. The additional 3 per cent rise in the cost of goods sold was rendered by pricier raw materials, higher energy prices, and currency depreciation, said Muhammad Zahangir Alam, chief financial officer of the drug maker.
The bottom-line growth was squeezed by increased import costs, with the bar on increasing prices of drugs, imposed by the drug administration, said Md. Moniruzzman, chief executive officer of Prime Bank Securities.
He, however, said the revenue growth was outstanding for a leading drug maker like Square Pharma.
Square Pharmaceuticals saw its operating expenses go up by 19.55 per cent year-on-year in July-December, FY24. At the same time, the company's selling and distribution expenses rose significantly.
The company's profit, however, got a boost from the segment of other income derived from cash and cash equivalent assets.
Square Pharmaceuticals in 2022 secured a huge income from foreign exchange gains. Later, the company had to liquidate its reserved dollars following an instruction of the central bank amid the dollar crisis.
The company has a strong base of cash and cash equivalent assets, but the advantage of higher deposit rates is yet to be reaped in line with the policy rates. The outcome of a rise in deposit rates will be visible upon maturity of the fixed-income assets of the company.
Square Pharma has reported a 13 per cent year-on-year growth in other income for July-December, FY24.
It holds a strong position in the stock market for its significant market share in the broad index.
Having remained stuck at the floor price for seven months, the company started to see price movements on the Dhaka bourse in early July last year.
But the stock hovered around the floor price and emerged as a market puller since the first week of January this year as the regulator lifted the price restriction.
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