HR Textile endures record loss for gas, electricity supply shortage

HR Textile made a loss in FY24 higher than double its aggregate profit in the preceding five years due to what it said is gas and electricity supply shortage.

Its negative earnings of Tk 574.78 million in FY24 far outstripped its profits of Tk 239.62 million in the five years through FY23.

The company failed to meet a minimum target of production for disruption to gas and electricity supply, said company secretary Md Wali Ullah.

The production fell sharply in the first quarter of FY24 and then kept deteriorating in the next two quarters. A dwindling number of workers following unrest amid working capital shortage added to the financial woes.

"Ultimately, orders from buyers fell severely and the company experienced a record loss," said Mr Ullah.

For the poor financial performance, HR Textile has failed to recommend any dividend for FY24 for the first time in nine years. It has paid 5-15 per cent cash dividends annually since FY15.

The company reported positive earnings of Tk 0.94 per share for the first quarter of FY24. It plunged into the red in the second quarter, witnessing a loss of Tk 3.50 per share in the quarter, followed by a loss of Tk 3.33 per share in the third quarter.

As there was no significant collection, the company's operating cash flow remained negative in FY24 as in the previous year.

It reported net operating cash flow per share (NOCFPS) of Tk 10.90 in the negative for FY24, down from Tk 14.17 in the negative reported for the previous year.

The company's previous profit-related data indicates that it started facing an abnormal decline in FY23.

HR Textile secured a significant year-on-year profit growth in 2021. Though it could not stay on the growth trajectory, it maintained the earnings the next year before the plunge in FY23.

The company sought the regulator's permission in October 2022 to increase paid-up capital by issuing rights issues at a ratio of 1R:1, meaning one rights share would have been issued against one existing share. But in May 2023, the Bangladesh Securities and Exchange Commission (BSEC) rejected the proposal.

Its current paid-up capital is Tk 292.22 million.

The share price of HR Textile, a 'B' category company, closed at Tk 85.80 per share on March 25 this year. It came down to Tk 40.10 per share on June 2.

Afterwards, the company was unable to see any upward trend and the price finally closed at Tk 26.80 per share on Tuesday on the Dhaka Stock Exchange (DSE).

General shareholders hold 42.03 per cent shares of HR Textile, while sponsor-directors and institutes hold 48.23 per cent and 9.74 per cent stakes respectively, according to data available until November 30 this year.

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