RN Spinning, FAR Chemical revive after mergers

RN Spinning and FAR Chemical – both listed on local stock exchanges and owned by FAR Group – have managed to eke out profits after years of losses, according to regulatory filings.

The companies said they achieved remarkable progress in operations following their mergers with two non-listed firms owned by the same group. These operations have facilitated their comeback.

FAR officials made these claims on Saturday while they escorted a group of journalists on a visit to their factories, which were operating at full capacity.

In October last year, the Bangladesh Securities and Exchange Commission (BSEC) approved the mergers of Samin Food and Beverage Industries and Textile Mills Limited with RN Spinning Mills Limited and SF Textile Industries Limited with FAR Chemical Industries Limited following the High Court approval.

According to the Dhaka Stock Exchange (DSE), RN Spinning has been counting losses since the FY19, as its operations fully closed in 2019 due to a fire incident. On the other hand, FAR Chemical's spinning unit is running now. However, its chemical unit closed a few years ago due to the nosedive chemical business of the group.

Md Humayun Kabir, director of marketing at FAR Group, said, "RN Spinning's operation has been closed for around five years due to a fire incident. Investors also did not get anything during the period. We try to change this situation for the better. After the merger, we have been able to get back into business properly. We hope, investors will get better returns from now on."

He said FAR Chemical is also a running factory with two units. The company diversified its business by investing Tk300 crore in a spinning unit before the merger, which is running. Its daily spinning capacity is 18 tonnes with 33,600 spindles.  

In the July-March period of the current fiscal year, RN Spinning posted revenue of Tk280.65 crore, which was Tk272.89 crore a year ago.

Its profit after tax stood at Tk2.74 crore, and earnings per share stood at Tk0.09.

RN Spinning's share fell by 0.67% to close at 14.90.

Meanwhile, FAR Chemical achieved revenue of Tk213.38 crore in the first three quarters of FY24, which was Tk156.98 crore in the same period of the previous year.

Its profit after tax stood at Tk4 crore, which was a loss of Tk8.20 crore in the same period of the previous year.

Its earnings per share stood at Tk0.26, and its net asset value per share was Tk32.59 at the end of March 2024.

FAR Chemical shares jumped over 8% to reach Tk24.50.