Square Pharma declares record dividend, Tk500cr expansion plan

The country's leading drugmaker Square Pharmaceuticals PLC declared a record 110% cash dividend to its shareholders for the fiscal year 2023-24 and decided to invest Tk500 crore to boost its production.

In the previous 2022-23 fiscal year, the company paid a 105% cash dividend to its shareholders.

In a board meeting today (23 October), Square Pharma's board of directors announced the said dividend and approved a Tk500 crore investment for Balancing, Modernisation, Rehabilitation and Expansion (BMRE), capital machinery and lands for future expansion.

To approve the dividend and audited financial statement, the company will hold the annual general meeting (AGM) on 18 December through a digital platform with a record date set for 21 November.

According to the company officials, the demand for its products is increasing daily. That is why the company has several manufacturing contracts with different companies like Renata Oncology and Apex Pharma to meet the increased demand.

The investment is part of its regular operation and expansion plan as per the growth of the pharma market. Each year we allocate a portion of our profit for that, they said.

According to the company's price-sensitive statement, Square Pharma made a profit of around Tk2,093 crore in FY24, which was also the highest profit in its history.

Including the financials of Square Pharmaceuticals' foreign subsidiary Square Pharmaceuticals Kenya EPZ Ltd and three local associate companies named Square Textiles Ltd, Square Fashions Ltd and Square Hospitals Ltd, the company's consolidated earnings per share for the financial year 2023-24 stands at Tk23.61, up from Tk21.41 in the previous year. Its consolidated net asset value per share increased from Tk129.95 to Tk142.05.

On Wednesday, its shares closed at Tk224.50 each at the Dhaka Stock Exchange (DSE), which was 0.13% higher than the previous session.

Currently, Square Pharmaceuticals holds the position of the second-largest stock on the country's premier bourse, with its market capitalisation soaring to Tk19,900 crore.

The pharmaceutical industry of the country is worth Tk31,200 crore as of March 2024 and is highly concentrated among the top ten pharmaceutical companies, which collectively possessed 71.6% market share during this period. Square Pharma holds around 18% market share in the pharma industry, according to the IQVIA reports for the first quarter of this year.

The late Samson H Chowdhury started the drug business by setting up Square Pharmaceuticals Ltd in 1958 when the country's medicine market was dominated by multinational companies.

At present, the company produces 858 types of medicine, with Seclo, a drug for gastric ailments, leading sales.

Square Pharma has expanded its reach into the global market, paving the way for Bangladeshi pharmaceuticals on the international stage. As the first company from Bangladesh to export medicines in 1987, it has been supplying antibiotics and various other pharmaceutical products abroad. Square Pharma's export market now spans 42 countries, according to its website.

The paid-up capital of Square Pharma, which was listed on the share market in 1995, is Tk886.45 crore. As of September, sponsor directors hold 35.46%, institutional investors 15.26%, foreign investors 13.81%, and general investors 35.47% of the company's shares.

Square Pharma, which is known as a blue-chip company to stock investors, has been providing handsome returns to its investors since it was listed on the stock market.