Renata Limited, a leading producer of pharmaceuticals and animal health products, faces a profitability hurdle despite a remarkable 21.76% revenue boost in Q2 FY23-24 as reported. Increased costs, particularly in raw materials and utilities, contributed to a modest 1.49% profit uptick.
Reportedly, during the October-December quarter, Renata demonstrated strong financial results, achieving Tk922 crore in revenue and Tk89.18 crore in after-tax profit. Nonetheless, the first half of FY24 experienced a 9% profit dip, amounting to Tk190.52 crore, despite a significant 17% revenue increase, totaling Tk1,866.50 crore.
As reported, the cost of sales witnessed a notable 23.88% increase, coupled with a 22.40% rise in administrative, selling, marketing, and distribution expenses during the July-December 2023 period.
Renata’s standalone financials reportedly revealed a 21.2% growth in revenue to Tk918 crore, while profits remained stagnant at Tk85.18 crore in the December quarter of 2023. Excluding its Purnava & Agro business units, Renata’s core business units (pharma, animal health, export, and contract manufacturing) displayed a remarkable 24% revenue growth, all achieving double-digit expansion.
In response to financial challenges, Renata recently secured zero coupon bonds worth Tk660 crore from the Bangladesh Securities and Exchange Commission to repay short-term bank loans, anticipating potential increases in interest rates.
In an annual general meeting reportedly held on December 9, 2023, Renata’s shareholders approved the issuance of preference shares to raise Tk350 crore, aimed at refinancing existing loans. The company had subsequently applied to the commission, indicating a proactive approach to navigating financial uncertainties.
Renata Limited’s recent financial report underscores the delicate balance between revenue growth and profit margins in the pharmaceutical industry. The company remains resilient, actively addressing challenges through strategic financial decisions and seeking shareholder support to ensure sustained growth in the dynamic market landscape.
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