Square Pharmaceuticals Ltd and Square Textiles Ltd, two concerns of Square Group, saw their profit hit by higher expenses in the July-September quarter of 2022-23 owing to higher raw materials and fuel prices and the energy crisis.   

The cost of production has gone up for the companies in Bangladesh, like those around the world, for the increase in the price of raw materials, fuels and energy amid the supply disruption and the exchange rate volatility caused by the Russia-Ukraine war.

So, Square Pharmaceuticals said its profit growth slowed in the first quarter of the current financial year as its operating expenses soared.

The country's largest pharmaceutical company's profit rose 10 per cent year-on-year to Tk 550 crore in July-September from a year ago, according to the first quarter financial statement.

The country's largest pharmaceutical company's profit rose 10 per cent year-on-year to Tk 550 crore in July-September from a year ago, according to the first quarter financial statement

The drug maker registered 8 per cent year-on-year growth in its gross revenue to Tk 1,881 crore during July-September.

While its cost for goods sold grew 7 per cent, its operating expenses, which include sale and distribution expenses, administrative expenses and finance costs, rose 19 per cent to Tk 295 crore in the three months to September from the identical quarter a year ago prior.

Square Pharma, however, closed 0.43 per cent higher at Tk 211 on the Dhaka Stock Exchange (DSE) yesterday.

However, the net operating cash flow per share dropped to Tk 5.87 in July-September of 2022 from Tk 6.61 a year ago.

Square Textiles saw its profit dip by 17 per cent in July-September owing to higher spending aimed at ensuring energy supply amid the gas and electricity crisis and fuel price hikes.

Since November 2021, the government has hiked the diesel price twice, sending it to Tk 109 per litre from Tk 65 to minimise the subsidy on petroleum products.

In Bangladesh, the electricity crisis has deepened owing to a fall in gas supply after the government put on hold buying liquefied natural gas from the international markets in order to save the foreign currency reserves, whose level has dropped by more than 23 per cent year-on-year in November for the escalated imports against lower export and remittance receipts. 

Square Textiles made a profit of Tk 37.68 crore in July-September this year, down from Tk 45.37 crore during the same quarter in 2021. Thus, the EPS of the textile miller declined to Tk 1.91 in the three months to September from Tk 2.30.

The net operating cash flow per share slumped by half to Tk 2.82 from Tk 5.23 during the period.

In a posting on the DSE, Square Textiles said its net cash flow decreased due to the volatility in business operations, realisation from debtors and import payments.

Its shares closed unchanged at Tk 67.50 on the DSE yesterday.