The Financial Express

Company profile: Square Pharma to invest Tk 3.50b for business expansion

| Updated: April 07, 2020 08:43:54

Evaly and Fianancial Express Evaly and Fianancial Express
Company profile: Square Pharma to invest Tk 3.50b for business expansion

Square Pharmaceuticals, country's top pharmaceutical company witnessed a steady performance in operational, financial and profitability thanks to its product quality and expanded market.

The country's largest pharma company's turnover was Tk 50.87 billion for the year ended on June 30, 2019 as against Tk 45.88 billion for the previous year, a growth rate of 10.85 per cent.

The other parameters including gross margin, net margin, earnings per share also continued to show positive trend.

The company's consolidated net profit after tax increased 9.01 per cent to Tk 12.65 billion for the year under review as against Tk 11.61 billion for the previous year, according to its latest annual report.

The consolidated earnings per share (EPS) stood at Tk 16.03 for the year ended on June 30, 2019 as against Tk 14.69 in the previous year.

In six months for July-December, 2019, the company's total revenue stood at Tk 22.42 billion and profit for the period of Tk 6.88 billion, according to data from the Dhaka Stock Exchange.

The consolidated EPS was Tk 8.16 for July-December 2019 as against Tk 7.46 for July-December 2018.

The company's performance during the year shows growth in turnover, gross profit and profit from operation due to effective measures taken by the management in purchases, inventory, operating expenses and finance cost, said Tapan Chowdhury, managing director of Square Pharma.

According to the latest annual report, its domestic sales rose 11.12 per cent to Tk 49.38 billion for the FY 2018-19, while the export sales advanced 2.76 per cent to Tk 1.49 billion.

Established in 1958, Square Pharma pioneered exports of medicines from Bangladesh in 1987 and has been selling antibiotics and other pharmaceutical products in 42 countries.

The company has already entered into the global arena with approval of UK, EU and US governments for marketing its products in those countries and set up a subsidiary company in Kenya.

Recently, Square Pharma has received the good manufacturing practices certificate from Congo, joining a growing list of medicine exporters from Bangladesh looking to make inroads into the African continent.

This certificate will open the door for the local medicine-maker to export pharmaceutical products to 11 central African countries as well.

The dividend payout (cash) of the Square Pharma also rose 24.83 per cent for the FY 2018-19 compared to the previous FY.

The company disbursed 42 per cent cash and 7.0 per cent stock dividend for the year ended on June 30, 2019.

Khandaker Habibuzzaman, company secretary of Square Pharma, said the company's wide network and the management's goodwill play a vital role in accelerating the net profit.

Square Pharma has also decided to set up a subsidiary company by investing Tk 3.50 billion to extend its foothold in the medicine market and to meet the growing demand for its products.

The company has decided to expand medicine production by forming a separate subsidiary company, he said.

To meet the growing demand, Square Pharma recently has also signed agreements with Renata Oncology and Apex Pharma for contract manufacturing of some of its products.

People familiar with the matter said the Square is maintaining the impressive growth amid growing demand of drugs due to rising illnesses among teeming millions caused by various diseases.

The continuous growing performance in operational, financial and profitability has enabled Square Pharma to hold the top position in the industry for over several decades, they said

Listed in 1995, each share of the Square Pharma closed at Tk 172.50 on March 25, on the Dhaka Stock Exchange (DSE), the last session before the government-announced shutdown.

The company's paid-up capital is Tk 8.44 billion, authorised capital is Tk 10 billion and the total number of securities is 844.23 million.

Sponsor-directors own 34.57 per cent stake in the company while institutional investors 10.30 per cent, foreign investors 19.48 per cent and general public 35.65 per cent as on February 29, 2020.

Presently, the pharmaceuticals industry of Bangladesh meets about 98 per cent of the local demand and exports to more than 147 countries.

Bangladesh's pharmaceutical industry is dominated by local players. Square Pharma leads the chart, grabbing about 17 per cent market share for the year 2018-19.

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