Lovello profit grows despite high material costs

Lovello Ice-cream – a brand of publicly listed Taufika Foods and Lovello Ice-cream PLC – posted a 28% growth in profit in fiscal year 2021-22 despite a hike in raw material prices globally. 

Last year, the net profit of the Ice-cream manufacturer and supplier increased to Tk12.16 crore, which was Tk9.50 crore a year ago.

Moreover, its sales revenue increased by 12% to Tk95 crore.

In FY22, the company recommended a 12% cash dividend for its shareholders.

During the year, its earnings per share stood at Tk1.43 and its net asset value per share was Tk12.90 as of 30 June 2022.

The ice cream market is growing by 12% to 15% in Bangladesh. The market is hugely affected by the Covid pandemic.

In the peak season of this year, Ice-cream manufacturers were trying to recover business and bring back confidence from the pandemic havoc.

But raw materials cost, supply, and operational cost affected achieving the expected revenue growth during the fiscal year.

AKM Zakaria Hossain, company secretary of Taufika Foods and Agro Industries, said "We achieved impressive profit growth during FY22 but it could have been better.

"The import cost has increased a few times as we import 65% to 70% raw materials that were affected in the profit."

Currently, the percentage of ice cream melting has increased due to load shedding, he said, adding that the company has decided to have more depots for storage ice creams in the off-season.  

Lovello Ice-cream is made of imported high-quality raw materials using state-of-the-art technology.  In 2021, the firm raised Tk30 crore through an initial public offering (IPO) to expand its business. 

Till 30 September 2022, sponsors and directors held 44.65%, institutions 25.25%, and general investors 30.10% of the shares in the company.

The last trading share price of the company was Tk38.40 on the Dhaka stock exchange on Monday.

According to market insiders, the estimated market size of domestically organised branded ice cream in Bangladesh is around Tk1,400 crore. Its value could reach Tk2,600 crore by 2025.