Download Half Yearly Report 2004

The financial performance during the first of half 2004 ending June 30 was in line with management expectations. Combined turnover increased by 29%, while net profit grew by 61%.  The significant rise in net profit is mainly due comparison with a low base. Specifically, first quarter profits in 2003 were unusually low. It is important to note therefore, that shareholders should not expect a 61% rise in profits at the end of this year. As intimated in the Chairman’s speech at the 31^st Annual General Meeting, we are expecting net profit growth in 2004 to be in the 30%-35% range --- assuming that the political climate remains relatively stable.

Md. Shafiul Alam

General Manager, Finance

Despite an impressive increase in sales and earnings, cash-flow from operating activities declined due to a planned rise in raw material inventory in anticipation of greater demand for Renata brands in the third quarter. Cash-flow from operating activities is expect to increase in the remaining months, however a significant portion of that increment would be used for financing the construction of a state-of-the-art hormone plant. Selling and distribution expenses have risen by 35% due to aggressive promotional activities on new products. Of late, Renata has successfully established new brands, and as such we expect the rise in expenditure to be offset by higher sales. At the half year mark, our earnings target for 2004 appears eminently achievable.

Md. Halimusshan

General Manager,

Pharmaceutical, Marketing

The first half performance for the pharmaceutical business was quite impressive. We were successful in brand-building in key therapeutic areas. Our knowledge-based activities for customers were instrumental in this success. In the first-half, the market in general showed fair growth. We utilised this favourable climate with customer-focused campaigns that put us ahead of our competitors in terms of prescription and market share. As a result, during this period Renata grew at more than twice the market growth rate.

Dr. Manzur Aziz

General Manager,

Animal Health

The animal health market made a good start in 2004. In particular, the large animal market registered respectable growth. Unfortunately, the poultry sector experienced a devastating crisis due to fears of Avian Influenza (AI) or “Bird Flu.” Although Bangladesh is free from AI, scare mongering by the media adversely affected public opinion about the safety of poultry products. Nevertheless, using a highly targeted marketing strategy we were able to register growth in poultry therapeutics and nutritional products. We remain optimistic about our performance in the remaining half of 2004.

M. Alamgir Hossain

General Manager, Operations

This year we faced a major challenge in containing costs due to developments in the international currency market. The dollar fell against most international currencies contracting the margins of our international suppliers. They in turn raised their dollar-billing prices to compensate for the shortfall in earnings. Fortunately, our procurement system that relies heavily on competitive bidding helped to curb the upward movement in Active Pharmaceutical Ingredient (API) prices. In addition, the streamlining of packaging materials and excipients procurement carried out in 2003 also helped us to generate substantial savings. Barring major fluctuations in the dollar, we expect a good year for procurement this year.