Emerald Oil loses 10.66% of market value after declaring no dividends

Highlights

• Share price fell by Tk3.4 to close at Tk28.50 each on the DSE
• A total of 2.41 lakh Emerald Oil shares were traded on Sunday
• The company declared no dividends for 2017, 2018, and 2019

Emerald Oil lost 10.66% of its market value on Sunday as the rice-bran edible oil manufacturer declared no dividend for its shareholders for 2017, 2018, and 2019.

On the day, the company's shares fell by Tk3.4 to close at Tk28.50 each on the Dhaka Stock Exchange (DSE). A total of 2.41 lakh shares of the company were traded throughout the day.

Minori Bangladesh, which acquired the company, set the date for its board meeting after almost six years to declare dividends and publish financial reports for the 2017, 2018, and 2019. At the meeting held on 23 February, the board decided not to pay any dividend to its investors for those three accounting years.

On the first working day following the dividend announcement, there were no circuit breakers in share price movements, allowing the shares to drop by more than 10%.

According to the price-sensitive statement of the company, it posted massive losses in 2017 when its earnings per share (EPS) were Tk34.34 negative and the net asset value per share was also Tk17.46 negative Tk17.46 compared to Tk3.33 and 17.23, respectively, a year ago.

Its EPS was negative at Tk1.97 and Tk1.14 in 2018 and 2019, respectively.

As the reason for the negative net asset value per share, the new management said the company's several physical assets were missing after it took over. Besides, the receivables are also not at the stage of recovery. Hence, these amounts are excluded from the account. Besides, the company has bad debt. And this is why the net asset value turned negative.

In 2021, Minori Bangladesh, a subsidiary of Japanese farming company Minori Co Limited, got the securities regulator's nod to bring the company back into production by investing more than Tk40 crore.

The publicly-traded company, Spondon, producer of the most forgotten rice-bran oil, was out of business for five years as its original owners fled for a loan scam.

The new owner could have resumed production in January 2022. However, due to a gas shortage, it was unable to begin production at full capacity. It is now producing de-oiled rice bran (Dorb) along with Spondon brand oil.

Emerald Oil Managing Director Afzal Hossain said in the extra-ordinary general meeting, "Gas connection has been restored after paying the outstanding bill of Tk2.62 crore. LPG stations and diesel burners have been installed as alternatives due to a gas shortage at the national level.

"Because the cost of LPG and diesel burners is high, the work of setting up a husk-fired boiler and a 750 kV power station is going on. Minori has invested Tk31.56 crore so far, if required, it will invest more to accelerate the company."

Incorporated in 2008, Emerald Oil Industries Ltd began production of its Spondon-branded rice-bran oil in 2011 and entered the bourses in 2014.

The company raised Tk20 crore by issuing two crore general shares at a face value of Tk10.