Square Pharma posts record profit on higher sales, to pay highest-ever dividends

Square Pharmaceuticals has posted a record annual profit of Tk 23.97 billion in FY25, driven by higher sales and substantial earnings from subsidiaries.

The country's largest drug manufacturer, and a flagship company of Square Group, registered a 14.5 per cent year-on-year profit growth for the year, according to price-sensitive information published on Wednesday.

The record consolidated profit prompted the company to declare its highest-ever cash dividend - 120 per cent - for FY25, up from 110 per cent a year ago.

As a result, investors will receive Tk 12 per share, and the company will spend Tk 13.40 billion in total to pay cash dividends from its annual earnings of Tk 23.97 billion.

"This sustained growth momentum can be attributed to several factors, including increasing domestic demand for healthcare products, exports earnings and income from subsidiaries," said Muhammad Zahangir Alam, chief financial officer of Square Pharmaceuticals.

Alongside operating income, interest income from investments also played a vital role in profit growth, he said, adding that Square Pharma, having zero bank loans, invested its surplus cash in government securities and bank deposits.

Square Pharma's consolidated revenue rose around 9 per cent year-on-year

in FY25.

Revenue from the company's plant in Kenya jumped 240 per cent year-on-year to Tk 530 million, while earnings from Square Lifesciences rose 59 per cent year-on-year to Tk 12.14 billion in the nine months through March this year.

Akramul Alam, head of research at Royal Capital, said Square Pharmaceuticals continues to grow every year in both local sales and export earnings owing to strong consumer trust in its products.

"The company made a stellar performance absolutely with 17 percent return on equity, meaning shareholders value addition in financial terms," he said.

The company's ability to produce high-quality generic medicines at relatively low costs has strengthened its competitiveness in the global market as well, Mr Alam added.

He said Square Pharma has demonstrated business and management acumen, superior execution, relentless innovation, and an ability to act ahead of the market, defying economic headwinds.

The board of directors has also approved a proposal for BMRE (Balancing, Modernization, Rehabilitation, and Expansion) and the purchase of capital machinery and land for future expansion at a cost of Tk 6.50 billion.

Square Pharma has seen a surge in demand for its products in recent times. To meet this increased demand and introduce new products, the company has entered into manufacturing contracts with local firms such as Aristopharma, Euro Pharma, Renata Oncology and Apex Pharma.

Though Square Pharma's business mainly focuses on the local market, it sought to expand its horizons beyond the border from early on, pioneering medicine exports from Bangladesh in 1987 by shipping antibiotics and other pharmaceutical products.

Over time, the company has gained a foothold in the export market, supplying drugs to well-regulated markets such as the US and EU nations.

It set up a plant in an export processing zone in Nairobi in 2018 and commenced commercial production in 2023.

The annual general meeting (AGM) will be held on December 15, while the record date for dividend entitlement is set for November 16.

Square Pharma is considered one of the best-performing blue-chip stocks, with the second-largest market capitalisation of Tk 188.8 billion as of Wednesday.

Its stock on the Dhaka Stock Exchange closed unchanged at Tk 213 per share on Wednesday.

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