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Company profile

Net profit slumps on price hike of raw materials

| Updated: December 17, 2018 15:28:13


MI Cement posts 33pc revenue growth

MI Cement Factory Limited posted a 33 per cent rise in revenue in fiscal year (FY) 2017-18, compared to the previous fiscal, helped by production initiating and market expansion.

The total revenue of MI Cement, which produces 'Crown Cement', stood at Tk 12.56 billion in FY '18 as against Tk 9.44 billion in the previous fiscal, according to its latest annual report.

However, the company's net profit fell by more than 52 per cent year-on-year to Tk 315 million, as administrative cost of selling and distribution expenses shot up.

"The cost of goods sold (COGS) has increased by 39.09 per cent in 2017-18 over the previous year due to increase in cost of raw materials consumed, packing cost, fuel/power consumption cost and factory overheads, which were beyond the control of the management," according to its annual report.

Masud Khan, chief executive officer of the MI Cement, said the cost of all raw materials, including the clinkers, rose abnormally.

"The devaluation of currency against the dollar and the hike of financial costs, including transport cost, have also left a negative impact on our business," he said.

Mr Khan noted that all these adverse factors have combined to significantly erode the gains from revenue and bring down the profit after tax by 52 per cent over the previous year.

Factory overheads increased sharply due to the rise in electricity bill.

In 2017-18, the electricity bill soared due to an increase in the production quantity for newly introduced unit-V and the hike in tariff rate of electricity for commercial use, the annual report said.

The above expenses rose due to an increase in the manpower for newly introduced unit-V, it added.

On the other hand, in 2017-18, the non-operating income and the share of profit from associate companies decreased by 99.75 per cent and 50.86 per cent respectively as well as financial cost surged by 59.84 per cent, the report said.

As a result, net profit fell by 52.26 per cent from Tk 661.08 million to Tk 315.61 million and the net profit margin also slumped by 64 per cent, compared to the previous year, according to the annual report.

The company declared 15 per cent cash dividend for the year ending on June 30, 2018. Its annual general meeting (AGM) was held on December 06.

The company has also reported earnings per share (EPS) of Tk 2.13, net asset value (NAV) per share of Tk 47.98 and net operating cash flow per share (NOCFPS) of Tk 1.36 for the year ending on June 30, 2018 as against Tk 4.45, Tk 47.80 and Tk 1.73 respectively for the same period of the previous year.

Each share of the company, listed on the Dhaka Stock Exchange in 2011, closed at Tk 68.20 on Thursday.

The company's share traded between Tk 65 and Tk 92.40 in the last one year.

In FY '17, the company disbursed 20 per cent cash dividend.

The company's paid-up capital is Tk 1.48 billion and authorised capital is Tk 5.0 billion, while the number of securities is 148.50 million.

The sponsor-directors own 67.08 per cent stake in the company, while institutional investors own 17.24 per cent, foreign investors 0.31 per cent and the general public 15.37 per cent as on November 30, 2018.

MI Cement is one of the leading cement manufacturers in Bangladesh. It started its journey in 1994 with the commitment of manufacturing high quality cement under the brand name "Crown Cement".

The company exports its product to northeastern states of India, including Tripura, Meghalaya and Assam.

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