But its profit sees a marginal rise as cost of sales including raw material costs, utility cost increased significantly
Renata Limited — a manufacturer of pharmaceuticals and animal health products — has reported a 21.76% revenue growth in the second quarter of fiscal year 2023-24, but its profit increased by 1.49% as cost of sales including raw material costs, utility cost increased significantly.
During the October-December quarter, it logged Tk922 crore in revenue, and Tk89.18 crore in profit after tax, according to its consolidated interim financial statements.
In the first-half of FY24, Renata registered a 9% fall in profit to Tk190.52 crore amid a 17% growth in revenue to Tk1,866.50 crore.
In the last fiscal year, the drug maker made a profit of Tk233 crore. In the first-half of the current fiscal year, Renata saw its profit rising by 81% year-on-year.
Jubayer Alam, company secretary at Renata Limited, told The Business Standard, “Despite a significant hike in revenue, profit declined owing to increase of raw materials’ price hike, and utility costs.”
During the July-December period of 2023, its cost of sales increased by 23.88%, and admin, selling, marketing and distribution expenses increased by 22.40% over the same time of the previous fiscal year.
According to its financials on the standalone basis, Renata witnessed a 21.2% growth in revenue to Tk918 crore, but its profit remained flat to Tk85.18 crore during the December quarter of 2023.
Jubayer Alam said excluding its Purnava & Agro business units Renata’s revenue growth was 24%, with all core business units (pharma/ animal health/ export and contract manufacturing) delivering double digit growth.
In this period, its cost of sales increased by 27.2% mainly due to continued price pressure on raw materials especially due to taka devaluation as well as cost of sales also increased due to the continued effect of power costs and currency depreciation.
Renata had secured zero coupon bonds worth Tk660 crore from the Bangladesh Securities and Exchange Commission on 11 January.
Basically, the company had decided to issue bonds to repay its short-term bank loan with a fear of increasing interest rate.
The shareholders of Renata in its annual general meeting held on 9 December last year approved issuance of preference shares for raising Tk350 crore to refinance the existing loans, and the company had submitted an application to the commission subsequently.