Listed pharmas post higher profits as demand picks up
Almost all listed pharmaceutical companies in Bangladesh logged higher profits in July to September thanks to higher sales as people shook off coronavirus fears to avail treatments and the lower cost of bank finances.
Among the 10 major drug companies in Bangladesh, the profits of eight -- ACI Ltd, Acme Laboratories, Beximco Pharmaceuticals, IBN Sina, Renata, Square Pharmaceuticals, Orion Infusion, and Indo-Bangla Pharmaceuticals -- rose.
The earnings of Orion Pharmaceuticals and Silva Pharmaceuticals dropped.
The pharmaceuticals business saw slowdown at the heights of the pandemic in Bangladesh. Though the crisis hit the country in March 2020, it intensified in the first few months in 2021. People were reluctant to leave their houses to go to hospitals unless it was emergency.
Similarly, many doctors had cut business hours, but their service has almost returned to normalcy as coronavirus caseloads have dropped sharply in the last several months.
"As a result, the sales and profits of pharmaceutical companies went up," said M Mohibuz Zaman, chief operating officer of ACI Pharmaceuticals.
Profits of ACI Ltd, the parent company of ACI Pharmaceuticals, stood at Tk 30.12 crore in the first quarter, up a staggering 647 per cent from Tk 4.03 crore a year ago, according to the financial statements.
Md Moniruzzaman, managing director of IDLC Investments, one of the leading merchant banks in Bangladesh, echoed Zaman.
"This year, almost all drug-makers witnessed a big jump in their profits than their usual growth of 10 to 12 per cent," he said.
ACI Ltd's profit grew 155 per cent compared to the same quarter a year ago. The profits of Acme Laboratories were up 41 per cent, IBN Sina's 39 per cent, Beximco Pharma's 36 per cent, and Square Pharmaceuticals' 27 per cent.
"The profits of the listed drug makers were sales-driven," said Moniruzzaman.
The sales were higher in the quarter for a confluence of factors.
A huge number of people contracted Covid-19, so the demand for virus-related medicines was higher.
In the export markets, pharmaceuticals shipment from Bangladesh grew 33 per cent year-on-year in the July-September quarter on the back of anti-coronavirus drugs and the cash incentives from the government.
Medicines worth $56 million were exported during the period, up from $42.17 million in the same three-month period last year, data from the Export Promotion Bureau showed.
The lower interest rate on bank loans, owing to the lending rate cap enforced by the central bank since April last year, contributed to the sharp increase in the profits, according to Moniruzzaman.
The July to September quarter is the peak season for the pharmaceutical industry, and the period produced good profits, said Md Jubayer Alam, company secretary of Renata.
Renata clocked profits of Tk 139 crore in the first quarter of 2021-22, which was Tk 126 crore a year ago. Its earnings per share were the highest among all the listed drug-makers at Tk 14.19, the company's financial statements showed.
Many senior doctors had stopped private practices at their chambers last year due to the pandemic, sending the sales of medicines lower. Now, consultations are done in person.
"All the doctors have resumed providing face-to-face consultations to patients and are prescribing medicines, so our sales rose," said Alam, adding that physicians usually prescribed the medicines of renowned companies.
The domestic market size of the pharmaceutical industry was around Tk 25,300 crore in 2020. Local companies met 98 per cent of the demand.
The market size may grow to Tk 1 lakh crore in a decade, according to research of UCB Asset Management.
There are around 200 medicine manufacturers in the country, and they export pharma products to 151 countries.
The industry is expected to fetch more than $1.5 billion in foreign sales per year by 2030, almost nine times of the $169 million earned in FY21, said the report.
The annual growth rate may be as high as 15-16 per cent in the current decade.
Comments