Nearly 50% inflated production cost squeezes Aman Feed’s profit

Aman Feed Mills Limited, an animal feed producer, is feeling the pinch as the company’s profit plummeted exponentially in the fiscal year 2021-22, owing to a staggering 48.54 year-on-year rise in its production cost.

The listed company registered a production cost of Tk 917.7 crore in FY22, which was up Tk 230 crore from Tk 617.8 crore in the previous fiscal.

The company’s financial expenses also jumped by 35.6 per cent on a year-on-year basis in FY22.

According to the feed producer’s annual financial report, its financial expenses stood at Tk 34.14 crore at the end of FY22 against TK 21.99 crore in FY21.

Following the soaring production costs and financial expenses, its net profit dropped by 66.79 per cent to Tk 11.02 crore in fiscal 2021-22 versus TK 33.12 crore in net profit in the previous year.

Its earnings per share (EPS) stood at Tk 0.84 in FY22 versus the EPS of Tk 2.53 in FY21.

Officials of Aman Feed said the steep rise in the electricity and fuel oil prices led to a big rise in production costs, eroding the company’s earnings.

Although most of the raw materials are procured from domestic sources, the increase in the raw material prices in the domestic market shattered the income, they said.

According to the company’s financial report, it has to import some of its raw materials from foreign markets which are also available in the local market.

Following a slim profit, the board of directors of the company, recommended a 10 per cent cash dividend only for general shareholders for the fiscal year 2021-22.

The company had disbursed 15 per cent of cash among its shareholders for the year ended in June 2021.

The feed manufacturer would hold its annual general meeting on December 26, while it fixed the record date as November 28 for the splits of shares.

It raised Tk 72 crore through an initial public offering (IPO) by offloading two crore shares at a face value of Tk 36 each, plus a Tk 26 premium.

The company lifted its paid-up capital base by five times through the bonus dividend. The company’s paid-up capital currently stands at Tk 130 crore.

The stock price of Aman Feed Limited fell 0.30 per cent to Tk 33.50 per share on the trading floor of the Dhaka Stock Exchange (DSE) on Thursday.

Incorporated in 2005, the company got listed with the capital market in 2015.