Jute companies’ plights going on, investors in dismay

With declining exports of jute and jute goods and other plights, all three listed jute-sector companies are grappling with increasing hardships, putting investors in great dismay.

While companies from other sectors were presenting decent earnings and declaring lucrative dividends, the jute-sector companies were displaying slim performances, multiplying investors’ worries about their investment returns.

Sonali Aansh Industries Limited, a leading publicly traded jute goods exporter, posted over Tk 1.06 crore in net profit in the fiscal year 2021-22.

It had a net profit of Tk 0.31 crore in the previous fiscal year.

The company’s earnings per share (EPS) rose to Tk 3.92 at the end of FY22 from Tk 1.13 a year ago. Its net asset value (NAV) per share stood at Tk 228.58 at the end of the same fiscal.

Despite a significant rise in its profit, it declared no cash dividend except a 100 per cent bonus dividend to its shareholders for the year ended in June 2022.

It gave a 10 per cent cash dividend for the year ended in June 2021 although it had logged slim earnings that year.

The company’s board decided to enhance its authorised capital to Tk 50 crore from the existing Tk 10 crore, subject to the approval of its shareholders in the next annual general meeting and the Registrar of Joint Stock Companies (RJSC).

Jute Spinners Ltd, another company, did not declare any dividend for FY22 citing constant losses, while Northern Jute Manufacturing Company could not give any dividend due to legal complications.

Northern Jute Manufacturing Company’s factory located at the BSCIC Industrial Estate in Kushtia remained shut due to its failure to pay workers’ wages after the central bank had frozen its bank accounts on 23 February 2020.

Northern Jute shares were unstable in the past two years, according to the DSE data.

The company had a per-share loss of Tk 17.15 for the year-end in June 2018, and subsequently, it had not given any dividend for that year.

Consequently, the company was downgraded to the ‘Z’ category at the DSE. But it had registered earnings per share of Tk 23.29 at the end of FY19, bringing it back to the ‘A’ category again.

The company posted Tk 2.42 crore in net profit in FY20, and its board had declared to pay a 5 percent cash dividend to its shareholders but those stocks remained unpaid.

The company authorities, in this regard, said they were failing to pay any cash dividends because their bank accounts remained frozen since February 2020.

As soon as the court settles down the issue, they would consider earliest disbursing dividends to the general shareholders, they added.

Jute Spinners Ltd which had been out of production for more than six years since 2016 again started production on a trial basis in September this year.

Due to the factory closure, all its financial indicators remain negative, while its liabilities exceed the assets.

Jute Spinners incurred a net loss of Tk 7.62 crore in FY22 against a loss of Tk 7.15 crore in the previous fiscal year.

It reported a per-share loss of Tk 44.84 at the end of fiscal 2021-22 versus a per-share loss of Tk 44.59 in the previous fiscal year.

The company’s total liabilities stood at Tk 68.86 crore, surpassing its assets of Tk 28.9 crore till June 30, 2021, according to its auditor’s report.

The country’s exports from jute and jute goods dropped by 1.96 per cent year-on-year to $326 million in the first quarter of the fiscal year 2022-23 which was also 15.08 per cent lower than the export target.