Square Pharma's profit up 23pc in Q3 on higher revenue

Square Pharmaceuticals earned 23 per cent more to Tk 6.05 billion in January-March (Q3), FY25, compared to the same period of the previous year, as operating profits significantly jumped year-on-year.

Sales of medicines were remarkably high during the month of Ramadan in the quarter, boosting revenue. The remarkable bottom-line growth was also driven by a 50 per cent year-on-year jump in revenue earned from the company's overseas plant in Nairobi. That was the highest revenue growth the plant witnessed since inception.

The company's overall revenue advanced 22 per cent year-on-year to Tk 20.12 billion in Q3, FY25, supported by 10 new products introduced in the quarter under the classes of anti-diabetic, NAAIDs, hormone, anti-diarrheal and laxative.

"Apart from the domestic market, revenue earned from the project in Kenya boosted the company's top line growth," said Muhammad Zahangir Alam, chief financial officer (CFO) of Square Pharmaceuticals.

Square Pharmaceuticals constructed the manufacturing plant at the expense of Tk 1.70 billion in 2022. Revenue coming from the plant amounted to $1.5 million in Q3 FY25.

Subsequently, the company's operating profit increased significantly during the quarter through March this year, compared to the same quarter a year earlier.

Square Pharmaceuticals witnessed the highest year-on-year growth in profit in Q3 among three quarters of FY25. The year-on-year profit growth was 3 per cent in Q1 and 20 per cent in Q2 of FY25.

For the nine months through March this year, the drug maker reported a 16 per cent year-on-year growth in profit to Tk 18.74 billion, riding on 11 per cent year-on-year revenue growth to Tk 57.84 billion.

During the quarter, the company intensified efforts to fortify its presence in the local market, which is why selling and distribution expenses went up.

CFO Mr. Zahangir said they had conducted a special drive to bring even the country's remote areas under the coverage of the company.

According to him, the company could not adjust product prices to cover higher costs of production.

For example, Square Pharmaceuticals increased workers' minimum wage to Tk 16,000 from Tk 11,000 and made workers' jobs permanent.

The company's selling and distribution expenses were up 17 per cent year-on-year in the nine months though March this year.

However, the CFO said the drive to reach remote areas would help see a positive outcome in the days to come.

Square Pharmaceuticals, an 'A' category listed company, has shown a steady growth in profit over the last five years. It reported a profit worth Tk 13.35 billion in FY20 and the amount gradually rose to Tk 20.92 billion in FY24.

Meanwhile, the stock closed at Tk 215 each share on Tuesday, with a marginal loss of 0.19 per cent from the day before on the Dhaka bourse.

mufazzal.fe@gmail.com