Oil production suspension to have little impact on Rahima Food revenue

Rahima Food Corporation has suspended coconut oil production due to low market demand, without concerns over impacts on revenue as the segment constitutes less than 1 per cent of the company's sales.

"We will have an insignificant impact on revenue, as currently very little income comes from coconut oil. Our revenue mainly comes from cashew nuts," said Chief Financial Officer Shahidur Rahman.

However, following the disclosure of the production suspension on Wednesday the stock of Rahima Food Corporation had to endure a 1.87 per cent correction from the previous day.

"We have suspended it temporarily. Currently, running this business is not profitable for us but we will resume it when we will be able to make profits. Now, closing this operation is more profitable for us," the CFO said.

The financial statement for FY24 corroborates the claim that the impact on revenue will be negligible, which was also the case in FY23.

The board of directors of the company in a recent meeting decided to close the coconut oil plant, according to a stock exchange filing on Wednesday. Production will remain suspended until further notice, it said.

City Group acquired the company in 2016, which helped Rahima Food to return to production in 2022.

The company paid a 10?per cent cash dividend for FY23 and FY24.

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