Renata's profit drops 36% in Oct-Dec quarter
One of Bangladesh's leading drugmakers, Renata Limited experienced a shrink of 36% in profit in the second quarter of FY2023 due to the raw materials price hike caused by the dollar crisis.
In the October-December quarter, the company's earnings per share (EPS) was Tk7.66, which was Tk11.89 a year ago.
At the end of the first quarter of FY2023, its EPS stood at Tk18.52, which was also 23% lower than the previous year.
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The company also fell into a net operating cash crisis, it showed a net operating cash flow per share of Tk2.50 negative.
Its shares stuck on the floor price at Tk1,217.90 each since November last year at the Dhaka Stock Exchange.
Company secretary Jubayer Alam told The Business Standard that the decline in profits and profitability can be attributed to the following factors:
(1) Due to depreciation of the exchange rate, capital and raw material costs rose significantly. These two items account for almost all the decline in net profit.
(2) The rise in power and fuel prices raised manufacturing costs by Taka 21 crores, while travel and freight costs rose by more than Taka 10 crores.
(3) International freight costs rose by Taka 4 crores.
"We increased raw materials inventory by Taka 247 crores, to protect against dollar shortages in the near future. Stock build-up and increased expenditures as outlined earlier adversely affected cash-flow," Company secretary Jubayer Alam said.
"Despite these disappointing results, the company remains financially strong and therefore we intend to stay focused on our long-term strategic goals." he added.
