Profits of the National Tea Company Ltd – a publicly traded company – recorded the lowest dip in six years during the July – December period [H1] of FY24 due to rising costs of production.
The company posted a net loss of Tk 26.66 crore during this period, against a profit of Tk 1.11 crore recorded in the same period last year, show recently released unaudited financial report of the company. The losses stood at nearly 2,500 per cent when compared year-on-year.
National Tea Company Secretary Molla Golam Mohammad said, “Tea sales in auctions have decreased due to a Tk 35.12 dip in price per kg, despite the volume going up by 0.25 lakh kgs compared to the same period last year.
“Pricing in independent auction sales is beyond the control of the company. Sales in the local market also decreased year-on-year due to a dip in sales volume by 0.19 lakh kgs.”
A review of the company's financial report for H1 showed that in the first six months of FY19, the company earned Tk 88.75 crore in revenue, Tk 25.27 crore in profits and recorded earnings per share of Tk 28.55.
In the following year, the profits fell sharply but did not turn into losses. The profits were Tk 4.36 crore in FY20, Tk 1.59 crore in FY21, Tk 5.71 crore in FY22, and Tk 1.11 crore in FY23.
The company had received approval from regulator Bangladesh Securities And Exchange Commission (BSEC) to raise its paid-up capital in April 2023, the Dhaka Stock Exchange (DSE) had disclosed on its website at the time.
Back then, it said that the company secured approval from the BSEC to raise its paid-up capital by Tk 23.4 crore through the issuance of placement shares. National Tea will issue 2.34 crores of ordinary shares with a face value of Tk 10 each, according to a company filing.
The shares, however, would be offered at an issue price of Tk 119.53 each, including a premium of Tk 109.53. Paid-up capital is the amount of capital a company receives from shareholders in exchange for shares of stock.
But until February 1 this year, the company's website still shows a paid-up capital amount of Tk 6.6 crore.
Company Secretary Golam Mohammad said the matter is under process.
The National Tea Company posted a loss per share of Tk 40.40 in the first six months of FY24, compared to earnings of Tk 1.68 in the same period last year.
Earnings per share have decreased by Tk 42.08 mainly for an increase in costs and expenses by Tk 20.05 crore and a decrease in sale revenue by Tk 10.80 crore, according to the financial statement.
Net Operating cash flow per share (NOCFPS) has gone down by Tk 29.87 per share, which is equivalent to Tk 19.66 crore.
The main reason is because of increasing cash expenses amounting to Tk 16.69 crore due to incremental wages and finance cost, compared year-on-year. During this H1 period, cash sales also decreased by Tk 2.94 crore compared.
Incorporated in 1978 and listed on the stock exchange in 1979, the National Tea Company engages in the plantation, cultivation, manufacturing, and sale of tea and rubber in Bangladesh. Each share of the company rose by 2.72 per cent to close at Tk 472.90 on the DSE on Thursday.
The sponsor-directors owned a 44.90 per cent stake in the company, while the government held a 4.33 per cent, institutional investors 14.75 per cent, and the general public 36.02 per cent until December 31, 2023.
