Drug makers’ earnings bounce back first quarter

Drug makers’ earnings bounce back first quarter
Listed drug manufacturers saw their profits rebound in the first quarter (July-September) of the ongoing fiscal because of an increase in the quantity of healthcare seekers.

The pharmaceutical sector had taken a big hit by the end of the previous quarter, when most of the people refrained from visiting hospitals in concern with contracting Covid-19.

However the listed companies' blended profits soared by 76 % compared to the April-June quarter of fiscal 2019-20 going to Tk 734 crore in July-September.

Meanwhile, overall gains for listed drug makers grew 25 % year-on-year for the same period.

During the April-June quarter, local pharma firms witnessed a reduction in profitability as a result of low product sales of prescription medicine.

This directly contradicted the belief among many investors that it was unlikely for the pharmaceutical industry to visit a drop in profits amid the ongoing pandemic.

"We thought the medicine manufacturers would benefit the most through the pandemic as persons would spend more money on medicine but the reality was unique," explained Abdul Mannan, a inventory investor.

Listed drug makers saw their profits plunge 31.1 per cent to Tk 417 crore in the April-June period when compared to previous quarter (January-March) mostly because of the Covid-19 fallout.

"The sector was influenced the same manner other industries were however the good thing is that this bounced back again strongly in the initial quarter," he added.

Md Jubayer Alam, enterprise secretary of Renata, echoed the same.

Since most patients were confined in the home amid the outbreak, virtually all pharma companies saw their revenue plunge between April-June, he said.

The country's first official coronavirus patient was detected on March 8 and since that time, the quantity of positive infections has continued to go up.

In a bid to curb the spread of Covid-19, the government announced a 'general holiday' that started out on March 26. The nationwide lockdown was expanded numerous moments until it finally came to a finish on May 30.

During this time period, local drug manufacturers that source their recycleables from additional countries faced numerous issues.

"Therefore, as costs rose, a fall in revenue was the organic outcome," Alam said.

Renata secured the second highest income among all listed pharma corporations after Square Pharmaceuticals.

Through the April-June quarter, Renata's profits fell by roughly 10 % to stand for Tk 95 crore.

The business then witnessed a 29 per cent rebound in its profits for the first quarter of fiscal 2020-21 going to Tk 123 crore.

Simply because almost 60 to 70 per cent of all doctors returned with their chambers throughout that period, in line with the company secretary.

However, some patients even now remain sceptic about hospital visits, he added.

Of the 19 pharmaceutical companies listed with the country's bourses, three are yet to create their financial reports.

Of the 16 which may have been analysed so far, Square Pharmaceuticals booked the highest profit of Tk 393 crore, which was 37 per cent greater than that of the previous quarter.

In the April-June quarter, the company saw 20.7 % lower profits, which stood at income Tk 286 crore.

The country's top pharma company plans to invest Tk 250 crore to expand its production capacity.

Similarly, additional top drug makers also have announced that they can make further investments soon after seeing the market's growth prospect of the coming years.

The domestic pharmaceutical market will probably be worth around Tk 25,000 crore and is continuing to grow by around 14-15 per cent annually, in line with the Bangladesh Association of Pharmaceutical Industries.

"Most local pharma corporations have global standard tools and facilities and due to their dream of achieving the international marketplace, they continued to purchase the sector also amid the pandemic," explained Md Rafiqul Islam, head of corporate and organization secretary of ACME Laboratories.

After meeting 98 % of the domestic demand, local companies operate to have their items enter highly regulated countries just like the US and the UK.

Many firms have previously started exporting to those countries and because of the huge prospect of profits, they are investing a lot more on the sector, he added.

Acme Laboratories' gains tumbled 11 % to Tk 31 crore in the April-June one fourth nonetheless it increased by around 32 % within the next quarter to attain Tk 41 crore.

Acme's profits were the fourth highest among the listed pharma businesses.

Meanwhile, Beximco Pharmaceuticals' earnings fell 1 per cent to Tk 89 crore within the last one fourth of fiscal 2019-20 but rose by 20 per cent to Tk 107 crore in the first quarter of this year.
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