Home ›› 19 Sep 2022 ›› Stock
JMI Syringes and Medical Devices Limited, a medical equipment maker, registered a decline in profit in the third quarter of the fiscal 2021-22, thanks to the ascending dollar and increasing import costs.
The company’s earnings per share (EPS) plummeted by 31 per cent in the Q3 of FY22 versus the previous quarter in the same fiscal.
The company is well known as a supplier of medical equipment, especially syringes, to the health department of the government.
When the government had launched the Covid-19 vaccination programme, the company’s most of the revenue income came from the syringe supplies, because the government had to use millions of syringes to implement the vaccination programme.
Muhammad Tarek Hossain Khan, company secretary of the medical equipment maker, said, “Despite a syringe supply agreement with the government remains in place, the global economic recession and the increased import and production costs played roles to shrink our profit.
“Our productions were increasing always but we could not raise the products’ price complying with the production costs in time of the ongoing global economic stress, the key reason behind the profit fall,” he added.
“The government mainly renews a contract at the end of a fiscal or adds anything needed to it at that time.”
“Although we faced a business slack in the Q3, we hope it would rebound in the fiscal’s fourth quarter because we register most of our earnings at the yearend,” Tarek continued.
Despite a sluggish business performance, it is the wonder that the company’s share prices were seen soaring on the trading floor of the DSE in recent times.
The company’s share price surged by 24.92 per cent reaching from Tk355 to Tk439 in the five trading sessions of last week.
When asked about the share price surge amid a poor business performance, the company secretary commented that there had been no recent price-sensitive information behind that stock price rise.
The company’s total revenue in the Q1 of the fiscal 2021-22 stood at Tk38 crore, up 25% versus the tally of Tk30.03 crore in the same period of the last fiscal.
The company posted a net profit of Tk1.89 crore in the Q1, compared to Tk1.77 crore in the corresponding period of the last year.
In the Q2 of the FY22, its revenue stood at Tk57.44 crore while its net profit was Tk4.51 crore.
Revenue for the third quarter was Tk63.59 crore, with a net profit of Tk3.08 crore, 31.07 per cent lower than that in the same quarter in the previous fiscal.
The company had spent a volume of Tk16.34 crore on the use of raw materials in the first quarter of the fiscal 2021-22.
Later on, the use of raw materials surged by 146 per cent and 97 per cent respectively in the next two quarters of the fiscal.
The company has to import all types of raw materials except from the packaging operations done at its factory.
But the import costs jumped manifold in recent months due to the devaluation of Taka against the dollar along with price hikes of raw materials in the global markets, the prime cause that sent the company’s profit down in the latest quarter.
According to the company’s financial report, the use of its packing materials jumped by 419 per cent in the Q3 compared to the Q1 of FY22, raising the cost from Tk5.14 crore to Tk26.69 crore.
As per the DSE data, the company’s short-term loan stood at Tk5.35 crore as of June 2021, with a long-term loan amount of Tk49 lakh.
As of August of this calendar year, sponsors and directors held 79.65 per cent of its total share, while institutional investors and the general public own the remaining 5.76 per cent and 14.59 per cent respectively.
The company’s share price fell 5.98 per cent to Tk413.6 on the trading floor of the Dhaka Stock Exchange Sunday.
