Eastern Cables incurs loss for first time in its history

FT ONLINE

Eastern Cables Limited has incurred a loss of Tk 122 million in fiscal year (FY) 2018-19 for the first time since starting its operation in 1971, officials said.

The company suffered the loss also since its listing with the country's stock exchanges in 1986.

With gradual deterioration of its financial health, they added, the company now joined with other losing concerns of Bangladesh Steel and Engineering Corporation (BSEC).

With the cable-manufacturing unit, five out of nine active enterprises of the BSEC are now incurring losses.

"We are now seriously concerned about the company's financial condition," a senior official at the BSEC said.

According to sources, the BSEC sits in a meeting today (Tuesday) to discuss about the reasons behind the sorry state of the unit and decide possible measures to improve the financial strength of the company.

Official data showed that the net profit of the company was Tk 163 million in financial year 2013-2014, since when it started falling and stood as low as Tk 1.7 million in FY 2017-18.

The company's financial condition deteriorated further and it incurred a loss of Tk 122 million in the FY 2018-19 - the first time in the company's history since 1986.

Talking about the reasons, an official of the company, who preferred not to be named, said major portion of the off-loaded shares of Eastern Cables is owned by a private company, which has also business in the same field.

Despite owners of the company, the shareholders are creating various obstacles that have been hampering its smooth operation, he claimed.

"It might be intentional as they (the shareholders) are also the competitors of the cable maker," he said, without mentioning names of the shareholders.

This correspondent made several attempts via mobile phone to get response from the managing director of the company Engineer Ushamoy Chakma, but he did not reply.

When contacted, BSEC chief engineer Nazmul Haque Prodhan said they were working hard for turning around of the key unit of the BSEC that was not negative in the balance sheet until FY'18.

"We're seriously worried over the matter. We'll sit tomorrow (Tuesday) with high-ups of the company where the issue will be discussed," he said on Monday.

When asked about the non-cooperation of the shareholders, he said they heard about it and would discuss it in the meeting.

Each share of the state-owned company closed at Tk 187.70 on Monday, gaining 1.13 percent over the previous day.

The company disbursed a 5.0 percent cash dividend for the year ended on June 30, 2019.

The company's paid-up capital is Tk 264 million and authorised capital Tk 600 million while total number of securities is 26.40 million.

The sponsor-directors own 17.77 percent stake while the government owns 51 percent, institutional investors 18.52 percent and the general public 12.71 percent as of January 31, 2020, according to the Dhaka Stock Exchange data.

The company's earnings per share (EPS) stood negative at Tk 1.51 for October-December 2019 as against negative Tk 1.22 for October-December 2018.

In six months period of July-December 2019, its EPS was negative Tk 3.0 as against negative Tk 2.72 for July-December 2018.

Its net operating cash flow per share (NOCFPS) was negative Tk 9.80 for July-December 2019 as against negative Tk 6.89 for July-December 2018.

The net asset value (NAV) per share was Tk 19.07 as on December 31, 2019 and Tk 22.07 as on June 30, 2019.