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Renata profits fall 33% in Q3

Niaz Mahmud
20 May 2023 00:00:00 | Update: 20 May 2023 00:26:58
Renata profits fall 33% in Q3

Renata Limited, a leading drug manufacturing company in Bangladesh, witnessed a 33 per cent year-on-year drop in net profits in the first nine months (Jul’22-Mar’23) of the current fiscal year despite its revenue increasing by 9 per cent.

The situation, as per the company, is credited to the increase in the prices of raw materials and the rise in energy prices caused by the global dollar crisis.

The publicly traded company’s profit after tax was Tk 269 crore in the Jul’22-Mar’23 period of FY23, falling from Tk 405 crore recorded in the same period of the last fiscal year.

According to the pharmaceutical company’s unaudited Q3 financial report, its net revenue grew by 8.74 per cent, amounting to Tk 2,439.28 crore in the first nine months of the current fiscal year. The revenue increased from Tk 2,243.13 crore in the same period last year.

The company said that profits fell due to the increase in the prices of raw materials, the increase in energy prices, an increase in borrowing costs coupled with an increase in foreign exchange losses on imports, and a decrease in the return on investments in fixed deposit receipts (FDR).

The Taka lost about 25 per cent of its value in the July-March period of FY23 due to the dollar shortage caused by the Russia-Ukraine war.

The medicine manufacturer’s consolidated earnings per share (EPS) fell to Tk 23.47 in the current fiscal’s first nine months, while the previous fiscal’s EPS stood at Tk 35.35 for the same period, according to its unaudited financial statements.

Besides, EPS was Tk 5.18 for Jan-Mar’23 against Tk 11.78 for the same period in 2022.

The company’s consolidated net cash flow per share (NOCFPS) was Tk 0.49 for July’22-March’23 against Tk 17.33 for July’21-March’22. The company has stated that NOCFPS has decreased due to an increase in payments for costs and expenses from July 2022 to March 2023.

Renata’s net asset value (NAV) per share stood at Tk 266.94 as of March 31, 2023 while it was Tk 256.43 as on June 30, 2022.

The company recorded a profit of Tk 124 crore in the July-September period of FY23, down from Tk 138 crore in the corresponding period of the previous fiscal while its total sales fell to Tk 11.62 for the quarter from Tk 12.90 the previous year.

The drug maker’s sales rose 10.56 per cent year-on-year to Tk 837 crore in Q1 of FY23 while its profit declined as the expenses also climbed up 14 per cent to Tk 651 crore at that time.

Renata’s turnover declined to Tk 757.6 crore in the October-December period of 2022 from Tk 762.9 crore in the same period previous year. However, its cost of sales hiked up by 21 per cent year-on-year to Tk 483.7 crore in the second quarter of the financial year 2022-23.

Renata posted Tk 87.8 crore as income in the second quarter, which ends in December 2022, down from Tk 135.9 crore.

The company’s consolidated EPS dipped 35 per cent to Tk 7.66 for October-December of 2022, from Tk 11.89 from the same period previous year.

The company is engaged in the business of manufacturing, marketing, and distributing medicines, nutritional products, and vaccines for humans, along with veterinary medications.

The company started its operations in 1972 as Pfizer (Bangladesh) Limited. However, in 1993, Pfizer transferred ownership of its operations to local shareholders, and the company name was changed to Renata Limited.

The drug manufacturer was enlisted on the stock exchanges in 1979, and currently its shares stuck on the floor price at Tk 1,217.90 each.

The company is also the contract manufacturer for UNICEF and SMC for general products like birth control pills, oral saline, and micronutrient powders.

Renata Limited has 10 manufacturing facilities inside its three manufacturing sites at Mirpur in Dhaka, Rajendrapur in Gazipur, and Bhaluka in Mymensingh. Its product distribution is carried out by 19 depots across Bangladesh.