Renata PLC, one of Bangladesh’s leading pharmaceutical companies, achieved notable sales growth in the first half of fiscal year 2024-25. However, this success was overshadowed by a sharp decline in profits, driven by rising costs and macroeconomic challenges reportedly.
During the July to December period of FY2024-25, Renata’s sales climbed 12% year-on-year, reaching Tk 2,086 crore, fueled by strong revenue performance in its pharmaceuticals segment. Despite this, profits plummeted by 35% to Tk 124 crore, according to the company’s recently released financial statement.
The company maintained its sales momentum in the second quarter, posting a 16% year-on-year revenue increase. This growth was attributed to higher sales across pharmaceuticals, animal health, export markets, and contributions from its subsidiaries.
However, profit trends followed the first half’s trajectory, with quarterly profits declining 27% year-on-year to Tk 64 crore.
Read more: Renata Begins Export Of Psychiatric Medicines To The US
Key achievements in the second quarter included an 18% growth in exports and a robust 24% increase in the animal health segment, underscoring the company’s diversification strategy.
Renata attributed its profit decline to several cost pressures:
- Higher Finance Costs: Finance costs surged by 39% year-on-year to Tk 78 crore in the first half, driven by increased borrowing, rising interest rates, and foreign exchange losses stemming from the depreciation of the local currency against the US dollar in December 2024.
- Wage Increases: Wage expenses rose significantly due to staff increments in January 2024, a higher headcount, and increased payments to casual and contractual workers following labor unrest in August 2024.
- Depreciation and Investments: Depreciation expenses climbed as new capacity expansions were completed. Additionally, Renata increased investments in product development and maintenance to sustain its market position.
Renata’s financial results, released yesterday, triggered a 1% drop in its stock price, which closed at Tk 579 on Thursday at the Dhaka Stock Exchange.
While Renata’s sales growth reflects strong demand and diversification, the company faces challenges in navigating rising costs and macroeconomic headwinds. Its strategic focus on exports and the animal health segment could provide resilience as it adapts to the evolving economic landscape.
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