Square Pharmaceuticals has reported a 6.43% year-on-year growth in profit, reaching Tk 10.23 billion in the first half of the fiscal year 2024 despite facing high import costs. The company’s revenue also increased by 15% during the period, but higher operating expenses and cost of goods sold impacted the profit margin.

In the second quarter of FY24, Square Pharma experienced a decline in profit due to a significant rise in the cost of goods sold and operating expenses. The cost of goods sold and operating expenses advanced by 24% and 20% respectively during this period. Additionally, the cost of goods jumped by 18% in the six months through December, attributed to pricier raw materials, higher energy prices, and currency depreciation.

According to Muhammad Zahangir Alam, the chief financial officer of Square Pharmaceuticals, the increased import costs, combined with restrictions on drug price hikes imposed by the drug administration, contributed to squeezing the bottom-line growth of the company. However, Md. Moniruzzman, the chief executive officer of Prime Bank Securities, highlighted that the revenue growth of Square Pharma was outstanding.

Operating expenses of Square Pharmaceuticals rose by 19.55% year-on-year in July-December, FY24, with a significant increase in selling and distribution expenses. The company’s profit, however, received a boost from the segment of other income derived from cash and cash equivalent assets. In 2022, Square Pharma secured a substantial income from foreign exchange gains, but had to liquidate its reserved dollars following an instruction from the central bank amid the dollar crisis.

The company holds a strong position in the stock market due to its significant market share in the broad index. Despite being stuck at the floor price for seven months, Square Pharmaceuticals started to see price movements on the Dhaka bourse in early July last year. The stock, however, remained around the floor price and emerged as a market leader.