Home ›› 25 May 2023 ›› Stock
GQ Ball Pen Industries, the maker of the once popular ballpoint pen Econo, has long been in a dire state, as the company is not capable enough to compete with rivals in the absence of cutting-edge production facility at its factory.
The listed company, however, has recently planned to revive its business. In line with this move, it will install modern machinery at its factory to produce aesthetic-designed ball pens to strengthen its grip in the domestic market.
The loss-incurring ball pen maker is also suffering from capital shortfall, impeding its profitability.
But the once popular company is now planning a business turnaround, and it already sold a land property to manage necessary capital to serve the purpose.
The company in a disclosure filed with the Dhaka Stock Exchange (DSE) on Wednesday said it sold 7.67 katha of unused land in Agrabad of the port city Chattogram, for Tk 3.45 crore.
Of the amount, Tk 1.15 crore will be used to repay a short-term loan taken from Southeast Bank Limited. The remaining capital will be spent to install modern machinery at its factory.
Company officials with knowledge of the plan said the management of the firm was now planning to find ways to bring back the company to profits.
As per its third quarterly financial reports, the company has been in a loss for many years in a row.
Uzzal Kumar Saha, company secretary of GQ Ball Pen Industries Limited, told the Business Post, “Our income from the sale of land will be shown as non-operating income in the financial statement.”
“Econo Pen has a good reputation across the country, but we are losing the grip due to the lack of proper advanced pen manufacturing machinery.”
“So, we will try to diversify our products by installing advanced new machines, which will help us overcome the existing loss-making situation,” Uzzal Kumar added.
When asked about the loan repayment, he said, “We still have working capital. We expect its positive impact will be visible in our next annual financial report.”
The ball pen maker, according to a recent revaluation, had an asset value of Tk 85.27 crore till January this year.
Before the revaluation, it had mentioned an asset value of Tk 96.25 crore in its latest annual report.
Incorporated in 1981, GQ Ball Pen reined in the local pen industry with its flagship product ‘Econo’ for many years.
As per its FY22 financial report, the company’s short-term debt to Southeast Bank was Tk 3.17 crore, which was Tk 3.27 crore in FY 21.
The company recently released its third quarterly financial report for the current fiscal year.
The listed company posted a net loss of Tk 0.72 crore in the January-March quarter of the fiscal 2022-23, against a loss of Tk 1.21 crore in the same quarter last fiscal.
The company reported a loss per share of Tk 0.82 in the January-March FY23, against the loss per share of Tk 1.36 in the same quarter last fiscal.
In the first half of the fiscal year 2022-2023, the company had reported a net loss of Tk 1.99 crore, which was Tk 1.50 crore for the same period last fiscal.
The company’s revenue from product sales was Tk 2.74 crore in the first six months of the current fiscal year, which was 22 per cent higher than that of the same period last fiscal.
The company’s revenue from product sales was Tk 2.03 crore in the January-March quarter of FY23.
According to its financial statements, the company for the last time, had made a third quarterly profit of Tk 0.82 crore in the fiscal year 2016-17. Since then, it could not make a profit in any third quarters.
Despite constant losses, the listed firm had paid a 2.5 per cent cash dividend to its shareholders for the fiscal 2021-22.
The dividend, however, was distributed among general, institutional, and foreign shareholders, excluding sponsors and directors.
Alongside ballpoint pen manufacturing, the company also operates a plastic unit.
This unit was heavily damaged in a fire accident in 2017.
According to industry insiders, local pen manufacturers such as Matador, GQ Ball Pen, Olympic, Pran-RFL, Janani, and Kumu produce approximately 25 lakh ballpoint pens per day, with Matador dominating the market.
