ACI logs Tk155cr loss in Shwapno, foods, plastics, healthcare 

Infographic: TBS

ACI Limited reported a pre-tax loss of Tk155 crore in its retail chain Shwapno, foods, consumer plastics, and healthcare businesses during the July-September quarter. 

The conglomerate, however, achieved a pre-tax profit of Tk130 crore from its pharmaceuticals, animal health, consumer brands, crop care and public health, motors, pure flour, salt, and flexible packaging segments. 

The group incurred a net consolidated loss of Tk42.35 crore during the quarter, driven by a 38% rise in interest payments on rising policy rates. Its consolidated loss per share was reported at Tk5.54. 

These businesses operate under 12 subsidiaries of Advanced Chemical Industries (ACI) Limited, where the company holds majority stakes, according to its financial statement.

Between July and September, the group's total revenue stood at Tk2,971 crore, slightly down from Tk3,040 crore in the corresponding quarter of the previous year, reflecting a 2.29% decline. 

In its unaudited financial statement, the group said during the first quarter, it experienced a 2.29% decrease in revenue. 

This reduction was primarily attributed to countrywide instability, supply chain disruptions, energy shortages, and other macroeconomic challenges impacting the period, it added. 

The statement also mentioned that operating profit improved due to cost control initiatives. However, borrowing costs increased as a result of higher market interest rates, additional funding for working capital, and strategic investments to support business growth. 

As of September, ACI's total short-term loans amounted to Tk5,175 crore, while long-term loans stood at Tk640 crore. 

Sector-wise performance

ACI Limited demonstrated mixed financial performance across its diverse business sectors during the first quarter of FY25.

The motor business emerged as the highest revenue contributor, generating Tk757 crore with a 6% growth in the sector. However, profit before tax in this segment dropped by 15%, standing at Tk45 crore.

ACI operates its motor business through its subsidiary, ACI Motors Limited, in which ACI Limited holds a 48.10% stake. ACI Motors engages in the buying, selling, importing, and assembling of vehicles for both agricultural and non-agricultural use. 

The company also has a distribution agreement with India Yamaha Motors Private Ltd to sell and distribute Yamaha brand motorcycles and parts in Bangladesh.

The pharmaceuticals segment reported revenues of Tk404 crore, a 5% decline compared to Tk425 crore in the same quarter of the previous year. Profit before tax in this segment also fell slightly, reaching Tk38.85 crore, down from Tk40.88 crore in the prior year.

Shwapno experienced 13% revenue growth, earning Tk568 crore during the quarter. Despite this, the segment reported a significant pre-tax loss of Tk60.52 crore.

In other sectors, the conglomerate generated the following revenues: Tk132.59 crore from animal health, Tk229 crore from consumer brands, Tk99 crore from crop care and public health, Tk149 crore from pure flour, Tk57 crore from salt, Tk243 crore from foods, Tk160 crore from flexible packaging, Tk74 crore from consumer plastics, and Tk12.60 crore from healthcare.

The healthcare segment was the most loss-making business, incurring a pre-tax loss of Tk78.53 crore. Additionally, the foods and consumer plastics segments also reported losses during the quarter.

Stock performance of ACI

The company's share price dropped by over 14%, closing at Tk127 on the Dhaka Stock Exchange (DSE). The decline reflects a price adjustment following the stock dividend, with the record date set for 17 November. 

For FY24, the company proposed a 20% cash dividend and a 15% stock dividend, pending approval from shareholders at the annual general meeting scheduled for 29 December. 

Market insiders noted that the company has already obtained regulatory approval to issue bonus shares. Consequently, the share price was adjusted after the record date. 

It incurred a consolidated loss of Tk160 crore in FY24, extending its loss-making trend for the second consecutive year. 

In FY23, ACI paid a 40% cash dividend to its shareholders, while its highest payout was a 115% cash dividend and a 10% stock dividend in FY17. 

ACI Limited was incorporated on 24 January 1973 as ICI Bangladesh Manufacturers Limited.