Shyampur Sugar stock shines though it remains inoperative for 2yrs

The share price of the state-run company, Shyampur Sugar Mills limited, soared by 236 per cent in less than two years despite the company has been inoperative since December 2020.

The company had also not disbursed any dividend citing its hefty losses in the last two years.

Moreover, the company has been a loss-incurring one since the fiscal year 2016-17.

Even, the authorities of the listed company are now surprised by witnessing its soaring stocks as no reason was there that could stimulate its share price.

In the last two years, the lowest price of Shyampur Sugar stock was Tk 39.1 per share on February 8, 2021, whereas the highest price was recorded at Tk 131.6 per share on 9 September the same year.

The state-run company’s stock was traded at Tk 98.2 each on Monday.

The company, however, posted the lowest loss in the fiscal year 2021-22 over the last five years.

It registered a net loss of Tk 26.51 crore in FY22 versus the loss of Tk 62.56 crore in the previous fiscal.

Its net loss stood at Tk 60.69 crore in FY20 and it was Tk 32.87 crore in FY17.

Masood Sadiq, managing director of Shyampur Sugar Mill, told The Business Post their production has been suspended since December 3, 2020. As production remains suspended, we had no costs on machinery purposes, helping minimise the loss in fiscal 2021-22.”

“Being a publicly traded entity, our shares are being traded on the stock exchanges. But it is also surprising to us how the stock price of a loss-making company could soar without any business progress,” he added.

The sugar manufacturer posted a loss in earnings per share (EPS) of Tk 53.03 in the fiscal 2021-22 against an EPS loss of Tk 125.14 in the previous year.

The company reported a negative net asset value (NAV) per share of Tk 1,167.57 and a negative net operating cash flow per share (NOCFPS) of Tk 49.91 for the FY22 versus a loss of Tk 1,114.52 and Tk 86.06 respectively for the previous year.

In a filing posted on the DSE website on Monday, the company said its NOCFPS ratio was mitigated in FY22 because of its decreased expenditures and liabilities in the year compared to the previous year.

At end of FY22, the company’s long-term loan stood at Tk 31.10 crore with another short-term loan of Tk 1,94.78 crore.

The government owns a 51 per cent stake in the company, while general investors hold 47.66 per cent holding and institutional investors hold the remaining 1.34 per cent.

Shyampur Sugar Mill got listed in the capital market in 1996.

Bangladesh Sugar and Food Industry Corporation (BSFIC) in December last year shut the operations of six state-run sugar mills, including Shyampur Sugar Mill, to reduce the burden of losses made by those sugar mills.