Monno Ceramics sells entire Monno Fabrics stake for revival

Infographics: TBS

Monno Ceramics Industries, a flagship company of Monno Group, has sold its entire 9.79% stake in sister concern Monno Fabrics, to revive its business by injecting fresh funds to expand its business and settle bank liabilities.

Monno Fabrics in a disclosure on the stock exchanges this morning said its corporate sponsor intended to sell the entire holding of 1,12,54,000 shares of the company at prevailing market price.

The corporate sponsor intended to sell the stakes in the block market through the Dhaka Stock Exchange (DSE) within the next 30 working days, it said.

However, by the close of trading, DSE data revealed that Monno Ceramics completed the sale at Tk16.30 per share, amounting to a total trading value of Tk18.38 crore in 33 transactions.

After disclosing the share selling intention, the shares price of Monno Fabrics hit the upper limit by 9.94%, the highest limit for a single day, and shares closed at Tk17.70 each at the DSE.

Monno Ceramics Managing Director Rahseed Mymunul Islam told The Business Standard, "Monno Ceramics, a flagship company of Monno Group, was once a market leader. However, over the past 16 years, various disparities and challenges have caused the company to lose its position in the market.

"Now, we are trying to make a comeback," said Rahseed. 

"As part of this revival effort, shares of another sister concern namely Monno Fabrics, are being sold. The proceeds from the share sale will be used to expand the ceramics business and invest in other areas."

Monno Ceramic, the oldest porcelain and bone china tableware manufacturer and exporter in Bangladesh, is one of the major sponsors of Monno Fabrics Limited. Monno Welfare Foundation owns the highest 12.04% stake of fabrics.

Both the companies are listed on the bourses. Monno Ceramic Industries got listed in 1985, and the fabrics in 1996. Later, the Monno Fabrics was transferred to the over the counter market, and it returned to the main market in June 2021.  

According to the financial report of Monno Ceramics, the company's revenue decreased by approximately 50% in the 2023-24 fiscal year, while net profit increased by 34% compared to the previous year.

In FY24, its revenue declined to Tk30.27 crore and profit increased to Tk1.46 crore, the annual reports showed.

Although its revenue in FY22 was Tk90.41 crore and profit Tk3.89 crore, and in FY18, its revenue was Tk107 crore, and profit Tk7 crore.

In its FY24 annual report, Monno Ceramics Chairman Afroza Khanam outlined plans to install modern machinery for producing innovative ceramic products, aligning with current trends to meet both domestic and international demand. 

The report highlighted that FY24 was another challenging year for the company and the broader ceramic industry, largely due to the lingering effects of the Covid-19 pandemic, the ongoing Russia-Ukraine war, and inflationary pressures in developed countries that drove repeated increases in the US dollar rate. 

The ceramic products manufacturer said that the local ceramic industry is currently facing significant challenges for high inflation, gas crisis, increased production costs, production disruption amid gas crisis. 

Monno Fabrics is one of the fabric manufacturers of the Monno Group. Its revenue in FY24 was Tk158 crore and profit Tk1.06 crore. It had paid a 1% cash dividend to its shareholders.