Home ›› 02 Feb 2023 ›› Stock
Despite ongoing inflationary pressure and industrial energy crunch, most drug makers reported a profit fall in the first six months of the current fiscal year.
Unlike other business sectors, the Covid-19 pandemic brought in huge potential for the business growth of the pharma industry globally.
And riding on the demand surge since the pandemic for new drugs as well as hygiene materials, most Bangladeshi drug makers posted hefty profit growth since the fiscal year 2020-21.
Due to the pandemic, the demand for hygiene materials rocketed in both the local and abroad markets, helping the pharma industry reach a new height.
Bangladeshi pharmaceutical products had been exported to 199 countries, generating over $100 million in turnover in the fiscal year 2021-22.
But, since the start of the Russia-Ukraine war, the global economy entered a recessionary-like mode, battering the Bangladesh’s pharma industry as well.
Due to the war effect, the exchange rates of the taka dropped over 40 per cent against the US dollar, hitting the drug makers the hard.
Besides, energy prices went up many times since the start of the war, which led Bangladeshi businesses to cut their productions.
Moreover, the war caused an unusual price hike in almost all raw materials including drug ingredients in the global market.
As a result, the profits of most pharma sector companies fell year-on-year during the July-December period of FY23.
Square Pharmaceuticals, the country’s largest drug maker, posted a 10.7 per cent year-on-year surge in net profit in the first half of the current fiscal year, while its peer Beximco Pharmaceuticals’ earnings depleted by 15.12 per cent.
Square Pharma reported Tk 1062 crore in net profit in the July-December period of the fiscal year 2022-23 which was Tk 964 crore in the same period last fiscal.
The publicly traded company’s H1 earnings per share (EPS) rose to Tk 11.99 from earnings per share of Tk 10.88 for the same period last year.
It posted a net profit of Tk 461 crore in the second quarter of FY23, which was Tk 411 crore in the same period last fiscal year.
During the period, the drug maker’s earnings per share stood at Tk 5.78 which was Tk 5.24 for the second quarter of FY22.
When Square Pharma displayed a handsome profit, the country’s another leading drug maker Beximco Pharmaceuticals suffered a year-on-year profit fall of 15.12 per cent in H1 of the fiscal year 2022-23.
The drug maker’s earnings shrank due mainly to an increase in cost of production.
Beximco Pharma logged a net profit of Tk 265 crore in first six months of the fiscal year 2022-23 against a profit of Tk 313 crore in the same period last fiscal year.
The consolidated EPS of Beximco Pharma stood at Tk 6.02 for the July-December period of FY23 against Tk 7.12 for the corresponding period of FY22.
Its total revenue stood at Tk 1,968 crore at the end of the first half, which was up 16 per cent than that in the same period last fiscal.
Despite a rise in H1 revenue, its earnings fell due mainly to an increase in cost of production and a consequent decrease in gross margin, the company said.
Meanwhile, another leading drug maker Renata Limited reported a 22 per cent profit fall to Tk 209 crore in the first six months of FY23.
Its company secretary Jubayer Alam said, “We increased our raw materials inventory by Tk 247 crores to protect us from the dollar effect in the near future.”
The IBN Sina Pharmaceutical Industry – an enterprise of IBN Sina Trust – posted a net profit Tk 32.89 crore in the July-December period of the current fiscal, which was Tk 32.78 crore in the same period.
The ACME Laboratories’ profit rose to Tk 115 crore in the first half of FY23, while Orion Pharma’s net profit declined to Tk 44.69 crore.
Becon Pharma’s profit rose to Tk 59.96 crore from Tk 59.84 crore in H1 of the current fiscal year.
Navana Pharma’s profit jumped by Tk 2 crore to Tk 14 crore in the first half of FY23.
Advent Pharma’s profit rose to Tk 6.42 crore in the first six months of the current fiscal year.
According to industry insiders, the annual growth of the pharma industry might go as high as 15-16 per cent this decade, which has been 12.1 per cent for the last five years.
The Covid-19 helped the industry achieve a staggering 18.56 per cent growth in the FY21.
