Square Pharma plans Tk 250cr expansion

Square Pharmaceuticals is planning to invest Tk 250 crore to expand its business in the face of rising demand for drugs.

The drug maker at a board meeting decided to utilise the fund for balancing, modernisation, rehabilitation and expansion (BMRE) and to purchase machineries and lands.

The money would be sourced from the company's profits which have been declared as stock dividend for the year ending on June 30, 2020.

The company recommended 47 per cent cash and 5 per cent stock dividends for the year.

About the stock dividend, the company stated in a disclosure published in the Dhaka Stock Exchange website yesterday that issuance of bonus shares has been recommended to utilise retained profits as capital for business expansion.

The bonus share has been declared out of accumulated profit, it said.

It was not declared from capital or revaluation reserve, any unrealised gain or through anything that takes post dividend retained earnings in the negative, it said.

As per the financial report, the drug maker's revenue rose 4 per cent to Tk 5,293 crore last fiscal compared to that in the previous year.

Meanwhile, it logged Tk 1,336 crore in profit, which was 6 per cent higher.

The company saw double digit revenue growth almost every year in the last couple of years but this year the trend got disrupted for the coronavirus pandemic, said a top official of the company preferring anonymity.

During the pandemic, sale of prescription medicine dropped, which ultimately reduced the medicine company's earnings, he said.

"Normally, we invest into the business every year from the money accumulating from the stock dividends and this year is no exception," he added.

The drug maker is going to disburse Tk 397 crore among its shareholders as cash dividend this year.

Stocks of Square Pharmaceuticals dropped 0.78 per cent to Tk 203.5 yesterday.