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Earnings of many textile cos down

10 downgraded to `Z' category, shares of 16 dip below face value


Mohammad Mufazzal | Published: November 17, 2019 10:39:21 | Updated: November 23, 2019 10:41:57


The EPS (earnings per share) of majority number of listed textile companies declined while some eight others incurred loss in the last fiscal year (FY) compared to previous FY.

On the other hand, some 10 companies were downgraded to `Z' category in different times for not recommending dividend or not holding annual general meeting (AGM).

In another development, shares of 16 companies dipped below their face value on the stock exchanges following investors' less participation.

Many listed textile companies failed to perform as per investors' expectation despite the country's RMG sector posted over 11 per cent growth in exports in the FY 2019.

According to market insiders, many textile companies are selling items at prices lower than the production costs.

Asif Moyeen, managing director of Far East Knitting & Dyeing Industries, said the profits of textile companies are continuously declining due to the competition of manufacturing products at lowest prices.

"The export volume increased but the profit declined following the price war among the companies for manufacturing goods at the lowest price. It's the reality of the overall sector," Mr. Moyeen said while stressing on fair prices for long term sustainability of the industry.

The textile sector is the biggest sector of the capital market in terms of the number of companies.

Out of 55 companies, 44 so far disclosed their financial statements for the year ended on June 30, 2019.

According to information of Dhaka Stock Exchange (DSE), the EPS of 22 companies declined, while eight other companies reported loss for the period ended on June 30, 2019.

Minhaz Mannan Emon, a DSE director, said there are ups and downs in the profits of every industry.

"But most of the textile companies unnecessarily increased their paid-up capitals before going public. As a result, the possibility of rising EPS has reduced amid good business," Emon said.

Only 14 companies witnessed rise in EPS in the last FY compared to previous year.

The companies which witnessed rise in EPS are Apex Spinning & Knitting Mills, Envoy Textile, Evince Textiles, HR Textile, Hwa Well Textiles (BD), Kattali Textile, Metro Spinning, Pacific Denims, Queen South Textile Mills, Saiham Cotton Mills, Simtex Industries, Sonargaon Textiles, Stylecraft and VFS Thread Dyeing.

Of 22 companies whose profits declined, seven witnessed correction in EPS ranging from 21 per cent to 90 per cent.

Of those companies, the EPS of Alif Industries declined 21 per cent to close at Tk 2.74, Desh Garments 39 per cent to Tk 2.67, Generation Next Fashions 53.26 per cent to Tk 0.43, Maksons Spinning Mills 75.51 per cent to Tk 0.12, Malek Spinning Mills 35 per cent to Tk 0.76, Matin Spinning Mills 68 per cent to Tk 0.97, and Tosrifa Industries 90 per cent to Tk 0.12.

Alltex Industries reported a loss of Tk 6.09 per cent, Dulamia Cotton Spinning Mills Tk 2.28, Familytex (BD) Tk 0.07, Mozaffar Hossain Spinning Mills Tk 0.93, R. N. Spinning Mills Tk 15.47, Saiham Textile Mills Tk 0.97, and Tallu Spinning Mills Tk 1.13 for the year ended on June 30, 2019.

The share prices of some of textile companies presently are much below their face value of Tk 10 each.

On Thursday, the share price of Alif Manufacturing Company closed at Tk 7.60, Alltex Industries at Tk 8.20, C & A Textile at Tk 1.90, The Dacca Dyeing & Manufacturing at Tk 3.20, Delta Spinners at Tk 4.50, Familytex (BD) at Tk 2.20, Generation Next Fashions at Tk 2.40, Maksons Spinning Mills at Tk 4.30, and Metro Spinning at Tk 6.0.

Of other companies, the share price of Mozaffar Hossain Spinning Mills closed at Tk 9.0, Mithun Knitting and Dyeing at Tk 7.0, R. N. Spinning Mills at Tk 3.0, Tallu Spinning Mills at Tk 3.60, Tung Hai Knitting & Dyeing at Tk 2.0, Zaheen Spinning at Tk 6.30, and Zaheentex Industries at Tk 3.50.

The companies transferred to 'Z' category are Alltex Industries, C & A Textile, The Dacca Dyeing & Manufacturing, Delta Spinners, Dulamia Cotton Spinning Mills, Generation Next Fashions, Mithun Knitting and Dyeing, Tallu Spinning Mills, Tung Hai Knitting & Dyeing, and Zaheentex Industries.

Of the companies which disclosed financial statements for the FY 2019, 22 have recommended dividend ranging from 1.0 per cent to 10 per cent. The companies recommended dividend in the form of cash or stock or both.

On the other hand, 11 companies have recommended dividend ranging from 12 per cent to 20 per cent in the form of cash or stock or both.

Stylecraft has recommended 150 per cent stock dividend.

mufazzal.fe@gmail.com

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