First Finance Limited has released its financial results for the first quarter of 2024, revealing a continued struggle with profitability.
The company's earnings per share (EPS) were negative Tk 1.94 for the January-March period of the year, slightly worse than the negative Tk 1.91 recorded in the same period of 2023, according to its financial statement.
The negative EPS indicates that the company continues to face significant challenges in generating profits. The slight increase in the negative EPS suggests that First Finance’s losses have marginally deepened over the past year.
The net operating cash flow per share (NOCFPS) remained unchanged year-on-year, at negative Tk 0.24. This consistency in negative cash flow indicates that the company has not made significant progress in improving its operational cash management, reflecting ongoing issues in converting its operations into positive cash flow.
Moreover, the net asset value (NAV) per share has deteriorated further, standing at negative Tk 33.64 as of March 31, 2024, compared to negative Tk 30.75 as of March 31, 2023.
The worsening NAV per share underscores the company's eroding financial position and the ongoing depreciation of its asset base.
The continuous negative financial indicators highlight First Finance’s ongoing challenges in improving its financial health. Stakeholders and potential investors are likely to be concerned about the company's ability to turn around its fortunes and achieve sustainable profitability.
Regarding the declaration published on the Dhaka Stock Exchange (DSE) website, First Finance is yet to comment on specific strategies or measures being implemented to address these financial difficulties.
Starting as a leasing company in 1999 and going public in 2003, First Finance grew its paid-up capital to over Tk 118 crore and outstanding loans stood at only Tk 927 crore at the end of September 2022.
Its shareholders got no cash dividends for 15 years in a row, and it has been a “Z” category company in the bourses since 2016 due to no cash or stock dividends. Since then, increasing recognition of bad loans has not allowed the company to show a profit except for 2019.
The 2 per cent stock dividend it announced in 2019 was a violation of rules, according to the Bangladesh Securities and Exchange Commission (BSEC).
The rising curve of net annual losses that skyrocketed to Tk 219 crore in 2021 has eroded shareholders' equity, which sank to minus Tk 170 crore, according to the DSE data.
First Finance shares having a face value of Tk 10 closed at Tk 3.5 apiece on Monday at DSE. At the peak of the 2010 bull market, the shares had hit above Tk 200.
BSEC restructured the board of First Finance on July 27, 2023, mainly due to the long-term poor performance of the firm. Abul Kalam Mohammad Humayun Kabir, Khandoker Nizamuddin, Mohammad Rafiqul Islam Rowly, Prof Mohammad Shofiqul Islam, and Qazi Moinuddin Mahmud were newly added to the new board.
