GQ Ball Pen Industries Ltd, which manufactures pens, has incurred huge losses, with loss figures soaring by as much as 346% in a year.
The company lost Tk6.82 crore in fiscal year 2019-20, up from Tk1.53 crore in the previous financial year. Its earnings per share (EPS) loss was Tk7.64 during this period.
Also, this loss was the highest of the last five years. Company officials said the ongoing novel coronavirus pandemic was to blame for the huge loss.
Due to the loss, the company will pay a 5% cash dividend to shareholders this time. Only ordinary, institutional and foreign shareholders will get the dividend – entrepreneurs and directors will not.
GQ Ball Pen, which was established in 1981, popularised Econo brand pens.
The company released its financial statements after a meeting of the board of directors on 25 November. The pressure to sell shares increased after the big loss was reported, and share prices have dropped by 22% since then.
Each share priced at Tk233 on 25 November came down to Tk182.9 on Monday.
GQ Ball Pen Company Secretary Uzzal Kumar Saha told The Business Standard pen sales had drastically declined as educational institutions remained closed because of the pandemic.
"Because of this closure, exams were not being held either. This caused our sales as well as earnings to go down. But we faced losses as business expenditures remained unchanged," he explained.
The government closed all educational institutions in March when the novel coronavirus broke out in the country.
Although this affected GQ Ball Pen's business in the last three months of the previous financial year, the impact was large on the figures of the whole year, company sources said.
They said though the pandemic greatly impacted the company's earnings, pen sales witnessed a fall even before the crisis began. The company introduced new products to retain customers, but earnings did not increase as per expectations.
It is now thinking of taking new initiatives, including introducing more new products, to grow its income.
GQ Ball Pen was listed on the stock exchange in 1986. In addition to selling Econo pens, it earns good money by investing in its plastic unit and the stock market.
The plastic unit was reopened after a fire burned it down in 2017. The company is constructing a commercial building in Uttara Model Town jointly with Building for Future Limited at a 48:52 share. It is expecting a good income by renting floors.
Although the company had seen good business for a long time since its inception, its earnings began to fall after 2012 because of competition. Now it makes profits as well as faces losses.
It incurred losses in the 2014-15 financial year but returned to profit next year before losing money for the next three years in a row.
In the first nine months of FY20, losses reached Tk1.33 crore. The company during this period sold products worth Tk7.92 crore and earned Tk56 lakh from other sources.
At the end of the financial year, losses reached Tk6.82 crore, with losses amounting to Tk5.49 crore in the last quarter.
When asked about the big loss in the last quarter, Uzzal said he could not give any details.
"The financial statements will contain detailed information. However, the pandemic caused our losses to increase. We could not sell products, and that trend is continuing," he added.
Ballpoint pen manufacturer Olympic Industries in a report last year said four crore students of the country buy four crore ballpoint pens every four days. Besides, numerous offices buy such pens regularly.
Local pen manufacturers – including Matador, GQ Ball Pen, Olympic, Pran-RFL, Janani and Kumu – produce 25 lakh ballpoint pens every day, with Matador dominating the market.
The demand for pens is also met by products imported from India through legal as well as illegal channels.