Volatile stock market pulls Sonali Paper to loss
Sonali Paper and Board Mills Ltd, a publicly listed concern of the Younus Group, reported a significant loss in the third quarter of the last fiscal year, primarily due to losses from its capital market investments, which adversely affected its overall earnings.
In the January to March quarter, Sonali Paper recorded a loss of Tk11.88 crore, a sharp increase from the Tk2.46 crore loss reported in the same period the previous year. The company disclosed the information during a meeting of the board of directors on 27 August.
Moreover, despite achieving a revenue of Tk70.05 crore which is slightly higher than the Tk68.74 crore earned in the corresponding period last year, the company’s other income reflected a loss of Tk15.43 crore, a drastic rise from the Tk2.99 crore loss recorded a year earlier.
The “other income” section in the company’s financial statement referred to stock market investment, bad debt recovery, bank interest, and dividends.
The company also posted a Tk3.60 loss per share, which was a loss of Tk0.75 in the same quarter of the previous year.
Sonali Paper, which specialises in producing white, printing, simplex, and duplex papers for the local market, saw its share price decline by 2.96%, closing at Tk183.40 on the Dhaka Stock Exchange (DSE) yesterday (28 August), a significant drop from its share price of Tk615.1 on 22 January of this year.
Over the nine-month period from July to March, Sonali Paper reported a profit after tax of Tk5.92 crore, down from Tk17.81 crore in the same period the previous year.
The company’s revenue during this period increased to Tk221.65 crore, up from Tk185.26 crore the previous year, largely influenced by its capital market investments.
The company was also scheduled to post its second-quarter results (October-December) in the same board meeting, however, due to shortage of time, the meeting was not completed, leaving investors in the dark about the company’s financial disclosure.
General investors failed to understand why the company’s share price was decreasing sharply.
In the October-December quarter, the company also reported a loss of Tk57 lakh, an improvement from the Tk2.87 crore loss in the same quarter of the previous year. Revenue during this quarter stood at Tk83.60 crore, higher than the Tk69.85 crore recorded a year earlier.
Founded in 1977 and listed on the DSE in 1985, Sonali Paper traded on the DSE’s over-the-counter (OTC) market for ten years due to non-compliance with listing regulations. The company returned to the mainboard in 2020 after demonstrating a business revival.
However, in February 2022, the Bangladesh Securities and Exchange Commission (BSEC) found that Sonali Paper had overstated the value of its land by Tk200 crore in its FY20 and FY21 financial statements, leading to a 65% increase in its net asset value in FY20 and a 63% increase in FY21.
Back in 2016, the company had its assets revalued by SH Khan & Co Chartered Accountants from Tk1.13 crore to Tk517.5 crore, reflecting a significant increase from the value at which it was bought several years earlier
As of 31 July 2024, sponsor directors hold 67.51% of the company’s shares, institutional investors own 8.14%, and the general public holds 24.35%.
