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In a bid to meet financial exigency and pour funds into its associate firms, Confidence Cement Ltd has decided to issue Tk 150 crore worth of convertible preference shares.
To this end, the cement maker will hold an extraordinary general meeting (EGM) on March 25 to get approval on it from its shareholders, further subject to regulatory approval, as per disclosure posted on the DSE website on Sunday.
Preference shares, also known as preferred securities, are a type of stock that allows shareholders to receive dividends announced by the company before equity shareholders.
Preferred stock shareholders also typically do not hold any voting rights, but common stock shareholders usually do.
The Chattagram-based cement company’s board proposed to increase its authorised capital from the existing Tk 100 crore to Tk 350 crore.
Besides they also planned the inclusion of preference shares as the capital to be divided into 20 crore ordinary shares of Tk 10 each amounting to Tk 200 crore and Tk 150 crore preference shares of Tk 10 each.
The publicly traded company reported a 20 per cent drop in profit year on year in the second quarter of the fiscal year 2022-23.
The company attributed the lower profit to higher raw material prices in the international market and the sharp depreciation of the local currency against the US dollar.
The cement maker raked in a profit of Tk 21.4 crore in the October-December quarter against Tk 26.78 crore in the same quarter a year earlier.
As a result, its consolidated earnings per share (EPS) stood at Tk 2.74 for Q2 of FY23, down from Tk 3.42 in the same quarter a year before, according to its unaudited financial statements.
The cement manufacturer’s revenue also edged down by 1.37 per cent year on year to Tk 1.05 billion in the three months through December 2022.
Its consolidated profit for the first six months (July-December) of the fiscal year 2022-23 also dropped by 23 per cent year on year to Tk 34 core.
Its net operating cash flow per share (NOCFPS) stood at Tk (4.98) for July-December 2022 against Tk (5.25) for the same period of the previous year.
The company has a paid-up capital base of Tk 82.14 crore.
Confidence Cement shares closed at Tk 89 per share on the DSE trading floor on Sunday.
Established in 1991, Confidence Cement commenced commercial operation in 1994. Presently, the company has an annual production capacity of 1.2 million tonnes of cement.
