Golden Harvest bounces back to profit in Q1

Golden Harvest Agro Industries Limited, which is engaged in the frozen food and ice cream business, bounced back to profit in the July-September quarter of fiscal 2021-22 after incurring losses in four consecutive quarters.

In the first quarter, it reported a net profit of Tk0.29 crore compared to a loss of Tk7.41 crore in the same period of the previous fiscal year.

But its sales were yet to catch up to the pre-pandemic level, and due to the low sales, it has been difficult for the company to repay bank loans.

Its sales jumped 38% to Tk16.21 crore in the first quarter of this fiscal year, but the sales value was around Tk30 crore in the pre-pandemic quarter. 

At the end of September, its total long-term loan stood at Tk97.75 crore and the current portion of the loan is Tk29 crore, which is payable this year.

A senior officer of the company, seeking anonymity, said the demand for frozen food has increased during the pandemic but the company's business had declined as small fast food outlets were closed. Because a large portion of frozen food was supplied to these places. Moreover, due to the closure of schools and colleges, tiffin-related sales were not available.

He added that the ice cream business had suffered the most. The company sells more ice cream in bulk. But the business did not go well as small shops were closed.

Meanwhile, the company has started exporting frozen food. It expects good business in the coming days, he said.

It will not take long for the business to reach the pre-pandemic level because of the change of habits in the people after the opening of schools and colleges. Therefore, the company's ability to repay the loan will increase, he said.

However, Lovello Ice Cream PLC, another ice-cream maker, reported a 20% growth in sales to Tk24.93 crore in the first quarter of this fiscal year. Lovello official said the company is providing good quality ice cream nationwide at low prices. In this way, their ice creams are within the reach of all kinds of consumers. So business has been good in the pandemic, too.

Meanwhile, MABS and J Partners, the auditor of Golden Harvest, said in its qualified opinion in the annual report of fiscal 2020-21, the company has provided Tk4.83 crore as share money deposit to its subsidiary Golden Harvest QSR Limited but the company did not convert the deposit into shares within the six months as per the circular of the Financial Reporting Council.

In fiscal 2020-21, it incurred a loss of Tk15.63 crore as the sales dropped 35% to Tk54.48 crore.

Despite the loss, it finalised a 3% cash dividend only for general shareholders. It had earlier paid a 2% cash dividend as interim. The total dividend was 5% for the FY2021 and the company will pay it from its retained earnings.

Golden Harvest Agro Industries was listed on the country's stock exchanges in 2013. Its paid-up capital is Tk215.80 crore.

Till 30 November, sponsors and directors held only 32.88%, institutional investors 37.28% and general investors 29.75% shares in the company.

The price of each Golden Harvest share closed at Tk17.50 at DSE on Sunday.