Sonali Paper profit dips in FY24 due to volatile stock market
40% cash dividend recommended, the same as in the previous fiscal year
Despite double-digit growth in its core business, Sonali Paper and Board Mills – a concern of Younus Group – reported a 20% decline in profit for the fiscal 2023-24, according to company officials.
The company's financials indicate that a decline in its other income, primarily from stock investments, led to its net profit dropping to Tk12.48 crore, down from Tk15.61 crore in the previous fiscal year.
During FY24, Sonali Paper saw an 11.63% growth in its core business — manufacturing paper and paper-allied products. The earnings per share (EPS) stood at Tk3.79 at the end of FY24, compared to Tk4.74 the previous year.
Despite the profit decline in FY24, the management recommended a 40% cash dividend for shareholders, the same as in the previous fiscal year.
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A company official, speaking to The Business Standard on condition of anonymity, said, "Income from the core business saw double-digit growth as sales increased over the previous fiscal year, but other income, primarily from stock investments, declined.
"The local capital market faced volatility in FY24, causing most stock prices to fall, including those the company invested in. As of June 2024, unrealised losses in stocks amounted to around Tk9 crore."
According to its FY23 financials, the company earned Tk14.53 crore from other income. However, it was not possible to determine the other income for FY24 as the company has not yet released its full financial report.
The net operating cash flow per share increased to Tk10.39 in FY24, up from Tk7.47 in FY23. Regarding the increase in cash flow, the company stated that during FY24, its sales and collections increased, which boosted its cash flow compared to the previous year.
The company's annual general meeting (AGM) is scheduled for 19 December and will be held through a digital platform. To identify its shareholders, the record date has been set for 10 November.
Sonali Paper specialises in producing white, printing, simplex, and duplex papers for the local market. Founded in 1977 and listed on the Dhaka Stock Exchange (DSE) in 1985, the company traded on the DSE's over-the-counter (OTC) market for ten years due to non-compliance with listing regulations. However, the company returned to the mainboard in 2020 after demonstrating a business revival.
After relisting on the main board, Sonali Paper saw significant growth, with revenue jumping to over Tk217.80 crore in FY22. A year earlier, in FY21, its revenue stood at Tk150 crore. This growth trajectory continued in FY23, with the company posting a revenue of Tk264 crore.
On Wednesday, Sonali Paper's share price increased by 1.56%, closing at Tk156.70 on the Dhaka Stock Exchange (DSE). However, according to DSE data, its share price has been gradually declining over the last few months.
On 15 April, each share was priced at Tk497.50, but a major sell-off since then dragged the price below Tk200. Over the past year, its share price had peaked at over Tk600 per share.
