The profits of ACME Pesticides Ltd, a newly listed company in the pharmaceuticals and chemicals sector, have been decreasing every year. The company’s net profits in the last financial year decreased by 31.22 per cent compared year-on-year.
Before trading began in November 2021, the company’s net profits for FY21 rose by 14.07 per cent over the previous year at Tk 22.21 crore. Profits have been steadily declining since listing. FY22 profits fell by 15 per cent to Tk 18.80 crore compared to the previous year.
The company’s profits at the end of last FY23 stood at Tk 12.93 crore.
There is no explanation on the Dhaka Stock Exchange (DSE) website as to why the profits have consistently declined since listing.
The Business Post tried to contact Company Secretary Ariful Alam on phone for comments on the matter, but he could not be reached till the filing of this report.
It should be noted that ACME Pesticides has also reduced the amount of dividends paid to shareholders due to falling profits. The company paid a 5 per cent cash dividend to shareholders at the end of FY22, but declared a dividend of just 0.10 per cent per share at the end of FY23 – less than one per cent.
After reviewing the financial status of the company at the end of June 30, 2023, the DSE stated on Thursday on its website, that for this period, the shareholders will be given a dividend of one paisa per share.
Final approval of the recommended amount will come during a virtual annual general meeting (AGM) scheduled for 10 June. The record date for the distribution of the declared dividend among the shareholders has been fixed to April 22.
A market insider, on condition of anonymity, said when new companies are listed in the capital market, they are in the "N" category. In the next few years, it is promoted to this category with good dividends.
But for ACME Pesticides Ltd, the situation is taking a turn for the worse.
In 2022, 5 per cent dividend was paid, but at the end of 2023, the company could not pay even 1 per cent dividend. As a result, it is almost predictable how the financial condition of this company will be in the future, said the market insider.
The regulatory body should look into why newly listed companies are not paying good dividends, he added.
ACME Pesticides has reported EPS of Tk 0.96, NAV per share of Tk 18.35 and NOCFPS of Tk 0.52 for the year ended June 30, 2023, against Tk 1.51, Tk 17.99 and Tk 1.47 respectively for the year ending on June 30, 2022.
The company reported net profit after tax for the ended June 30, 2021 around Tk 22.21 crore and basic earnings per share (EPS) Tk 2.12, against profit after tax of Tk 19.47 crore and basic EPS of Tk 2 for the FY20, said the company in a filing with the DSE on Thursday.
Acme Pesticides Ltd, a subsidiary of Sinha Group, raised Tk 30 crore from the capital market by issuing 3 crore shares to general investors at a face value of Tk 10 each.
According to its IPO declaration, Acme Pesticides will spend 33.8 per cent of the entire proceeds to construct factory building and some other establishments while 35 per cent will be used to acquire new plant and purchase machinery, 18.3 per cent for repaying bank loans, 6.7 per cent for electrical installation, and 6.2 per cent for IPO expenses.
Bangladesh Securities and Exchange Commission (BSEC) approved the IPO proposal of ACME Pesticides on July 19 2021.
Acme Pesticides is engaged in manufacturing and marketing of Agro products in the categories of fertiliser, insecticides, pesticides and certified seeds, household toiletries and other consumer products.
The company started commercial operation in 2010. Acme Laboratories Ltd, which got listed on the capital market in 2016, is also another subsidiary of the Group.
ACME Pesticides' stock price experienced a notable drop of 6.72 per cent to close at Tk22.20 at the Dhaka Stock Exchange (DSE) on Thursday, compared to the previous day.
