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Dulamia Cotton Spinning Mills has declared a 3 per cent cash dividend for general shareholders for FY25, its first payout in 16 years, despite the company remaining out of operation since 2018.
It managed to declare profits after many years due to rental income, said company secretary Kazi Ekramul Hoque.
According to a filing on Monday with the Dhaka Stock Exchange (DSE), the company made a profit of Tk 1.9 million in FY25, recovering from a loss of Tk 6.6 million the year before.
The listed textile company had been incurring losses for more than a decade, with production halted since 2018. Its machinery is now considered outdated, making its yarn uncompetitive with products currently available in the market.
In addition, the company has continued to face financial difficulties as it is a loan defaulter with Bangladesh Development Bank Limited.
Dulamia Cotton Spinning Mills is a company of Multimode Group owned by Abdul Awal Mintoo, vice chairman of the Bangladesh Nationalist Party (BNP).
Mr Hoque told The Financial Express, "We are working to resolve the issue with Bangladesh Development Bank Limited. Although our operations remain shut, we have rented out our premises, which generated some profit, enabling us to declare a dividend."
Following the dividend declaration, the company's share price rose 3.08 per cent to Tk 144 per share on Monday on the DSE. This pushed the stock's price-to-earnings (P/E) ratio to an abnormally high 576, indicating that the stock may be significantly overvalued if future growth expectations are not realized.
The company said its Annual General Meeting (AGM) will be held on December 3 and the record date for entitlement of the dividend has been set for October 23.
Besides earnings, Dulamia Cotton has also managed to improve its net asset value (NAV) per share to Tk (39.83) in FY25 compared to Tk (40.08) in FY24.
The company's cash flow has also improved - from Tk 40.08 in the negative per share to a positive Tk 41 per share in FY25.
A few years back, the auditor of the company said Dulamia Cotton Spinning Mills might have to shut down permanently as it had failed to revamp its production unit by replacing outdated machinery.
The auditor further noted that the company might never be able to resume production as its liabilities were many times larger than its assets in FY24.
The company had assets worth only Tk 6.2 for every Tk 100 of liabilities. This means if the company sold its entire assets, it would be able to pay back only 6.2 per cent of its liabilities.
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