Envoy Textiles’ profit drops 66% in FY21

Envoy Textiles Ltd, the world's first LEED-certified green denim manufacturing facility, which has been hit hard by the raw materials price hike and pandemic, on Monday reported 66% drop in net profit in FY21.

In the last fiscal year, its net profit was Tk9.39 crore and earnings per share Tk0.56, which was Tk27.41 crore and Tk1.63 the previous year.

Besides, the company also recommended a 5% cash dividend for the shareholders for the last fiscal. Earlier, they had paid 5% cash dividend as interim for the first quarter of the last fiscal. The total dividend will be 10% for FY21.

To get the dividend approved, the company will hold an annual general meeting (AGM) on 27 December. The record date will be 15 November for the AGM.

The company officials said the revenue was good in the last fiscal, but business cost increased due to cotton price hike in the world market.

Earlier in July, the company decided to invest Tk176 crore to enhance the production capacity of its spinning project by setting up an expansion unit.

The project is scheduled to be completed by July 2022, subject to a usual business and health environment condition.

The new project's production capacity will be 3,710 tonnes of yarns per year.

Out of the total investment, the company will provide Tk56 crore from its retained earnings and the rest will come from banks.

Talking to The Business Standard, Envoy Textiles Chairman Kutubuddin Ahmed said the firm is making investments to build new capacity to produce blended yarn, which is expected to help reduce over-rate cost.

Share price of Envoy Textiles, which was listed in 2012, jumped by 118% in the last six months and closed at Tk47 on Monday at the Dhaka Stock Exchange.