Golden Harvest incurs Tk7.34cr loss in Q1

Agro-based frozen food maker -- Golden Harvest Agro Industries Ltd -- has incurred a loss of Tk7.34 crore in the first quarter of the current fiscal, according to the financial statement of the company released on Wednesday.

The company secretary, Normal Chandra Sardar, said the food maker went through the loss in the wake of shutdown caused by the coronavirus pandemic.

Golden Harvest sells frozen foods like parata, chicken samosa, puri, chicken spring roll, chicken sausage, chicken nuggets, and French fries. It also has ice cream and pizza businesses.

In the post-shutdown period, the company incurred Tk7.34 crore loss during July-September quarter and Tk12 crore in April-June period.

The country went through a 66-day shutdown during April-May to curb the spread of coronavirus.

The listed company did not recommend any dividend to its shareholders for Fiscal Year 2019-20. 

This is the first time Golden Harvest failed to pay any dividend since being listed in the capital market.

In FY20, the company's Earning Per Share (EPS) was Tk0.04, but in the first quarter of this fiscal, the company could not post positive EPS. In this period, its EPS landed in the negative territory which was Tk0.34.

However, during the shutdown when all restaurants closed, people found their alternative ways to have those items as frozen foods or ready-to-cook foods.

There had been a good demand for frozen food amid the Covid-19 pandemic. The sales increased 25-30% because many people were still reluctant to go to hotels and restaurants, said Shahin Khan, CEO of Meena Bazar.

Pran-RFL has a separate frozen food brand named Jhotpot. Kamruzzan Kamal, director, marketing, said sales of frozen foods have increased significantly during the pandemic.

Asked when the demand for frozen food is on the rise during pandemic, why then Golden Harvest incurred loss. The company's chief financial officer denied making any comments on this.

Company secretary of Golden Harvest said, a major portion of sales came from the ice cream business. But during the pandemic period, the ice cream business came down to only Tk36 lakh from Tk15 crore monthly.

"Besides, our other businesses were also affected due to schools and colleges being closed. That is why the company's business dropped by 40% and we incurred losses for the first time. However, only the frozen paratha and bakery items business increased. So, the company is going to change its business policy," he added.

In 2019, the company raised Tk89.93 crore by issuing 8.99 crore right shares for business expansion.

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

Sponsors and directors now hold only 32.88% of the company shares, with institutional investors 39.90% and general investors 27.72% as on 31 October according to the data of Dhaka Stock Exchange (DSE).

However, in July, 0.23% of shares were owned by foreign investors, but they sold all of them in the next two months.

The price of each Golden Harvest share closed at Tk16.70 at DSE on Wednesday.