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Renata has posted a 38.6 per cent lower profit to Tk 2.22 billion for FY25 compared to the previous year, despite handsome revenue growth, as the cost of raw materials, labour, and finance increased.
The drug maker showed Tk 19.36 as earnings per share for FY25, down from Tk 31.53 a year earlier, according to a disclosure on Monday.
The company said it achieved robust top-line growth of 13.7 per cent, with a surge in revenue from its Irish subsidiary.
However, it was unable to translate revenue growth into a rise in profit. The result came as no surprise, as the company's earnings over the nine months through March were lagging behind that of the same period a year earlier.
Mustafa Aolad, CFO of Renata, told The FE, "Raw material prices have gone up but we could not increase our prices, which has cost us a decline in gross profit.
"As we have provided annual adjusted increment, the cost of labour has gone up too."
Moreover, Renata had taken a large sum of loans to implement its expansion plan before Covid, which pushed up its finance costs as interest rates increased.
Recently, the company collected low-cost funds, for example through the IFC loan and equity preference shares, to replace bank borrowings. This move will reduce finance costs in FY26, said the CFO.
The signs are already visible as the company secured 24.64 per cent year-on-year profit growth to Tk 0.74 billion in the first quarter of FY26.
However, due to lower profit, the company has declared a 55 per cent cash dividend for FY25, reduced from 92 per cent paid the year before.
Meanwhile, the stock of Renata slid 0.82 per cent to Tk 448.50 per share on Monday on the Dhaka Stock Exchange.
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