Most pharma companies post higher annual profits

Infograph: TBS

Most listed pharmaceutical and chemical companies have registered a higher profit in fiscal 2020-2021 compared to the previous year riding on a jump in sales during the Covid-19 pandemic.

Eight of the companies will pay a higher dividend than the previous fiscal year, four will disburse the same amount as it did a year ago while three firms, which reported a decline in profit, will reduce their dividend.

Drugs and hygiene products manufactured by pharmaceuticals and chemicals companies saw a sharp surge in sales during the pandemic.

It helped the pharmaceutical companies in the country to post good growth in terms of both revenue and profit compared to the previous fiscal year, according to industry insiders.

Until 8 November, 20 out of 31 including two listed foreign multinational companies in the pharmaceuticals and chemicals sector have published their annual financials for the 2020-2021 fiscal year.

Eleven of the companies have reported an increase in profit, and nine witnessed a profit decline compared to the previous fiscal year, according to an analysis by The Business Standard.

The rest of the companies from this sector are yet to publish their annual financials and declare a dividend for shareholders.

As per available data, three companies have incurred losses. Among them, two had incurred losses in the previous fiscal year too.

Two other companies have returned to profit last fiscal year, they incurred losses in the previous fiscal.

According to industry insiders, the annual growth of the pharmaceutical industry may go as high as 15-16% this decade, which has been 12.1% for the last five years.

The pandemic helped the industry achieve a staggering 18.56% growth in the 2020-21 fiscal year.

Beximco Pharmaceuticals, Square Pharmaceuticals, and Renata are in the club of more than Tk500 crore profit among the dozens of companies listed on the country's stock market.

In the pandemic, these companies reported a sharp rise in profits in the outgoing fiscal year. 

Beximco Pharmaceuticals' profit grew by 46% in FY21. Its consolidated earnings per share (EPS) stood at Tk11.49, which was Tk7.88 in the previous fiscal year.

Officials at the company said profit increased from its organic growth of business and part of this is attributable to the income from vaccine distribution and increased cash incentive from exports.

Square Pharmaceuticals – the industry leader – has posted a 19% increase in profit and its EPS rose to Tk17.99 from Tk15.07 in the previous year.

It said in an annual declaration, the growth is in its core business. The sales of pharmaceutical products have positively affected the EPS. 

Renata, the descendent of Pfizer Bangladesh, posted a 26% increase in profit. Its EPS rose to Tk51.94 from Tk41.14 in the previous year.

Orion Pharma registered a 41% increase in profit in FY21. Its consolidated EPS rose to Tk4.1 from Tk2.84 in the previous fiscal year. 

The IBN Sina Pharmaceutical's profit rose by 26%. Its EPS rose to Tk15.66 from Tk12.56 in the previous fiscal year.

Md Kabir Hossain, company secretary at IBN Sina, recently told The Business Standard, "Amid the pandemic, our revenue from drugs sales increased significantly. As a result, profit increased compared to the previous year."

ACI Formulations – an agrochemical manufacturer and supplier – has witnessed a 130% jump in profit compared to the previous year. Its EPS stood at Tk4.74, which was Tk2.06 in the previous year.

Advanced Chemical Industries (ACI) Limited – one of the country's largest conglomerates and manufacturers of pharmaceutical products – has returned to profit in the last fiscal year.

This fiscal year, ACI's EPS reached Tk5.5. In the previous year, its loss per share was Tk16.78.

Also, ACME Laboratories, Global Heavy Chemicals, Kohinoor Chemicals Company (Bangladesh), and Silva Pharmaceuticals have posted higher profits compared to the previous fiscal year.

On the other hand, Beximco Synthetics, Central Pharmaceuticals, and Far Chemical Industries have incurred losses. 

In which, Beximco Synthetics and Central Pharmaceuticals have continued incurring losses like the previous year.

Hence, they will not pay any dividends to their shareholders.

Far Chemicals Industries is a newcomer among the loss-making firms in the pharma sector, and despite the losses, the company will pay a 1% cash dividend.