Top officials of paper companies said they did not see any improvement in the Q1 earnings and profits due to the closure of educational institutions
The paper and printing business has been suffering a slowdown as educational institutions remain shut in the country due to the Covid-19 pandemic.
The income of companies listed in the capital market decreased in the fiscal year 2019-20. Many others incurred losses due to their inability to meet the expenses against the amount of income.
The financial conditions of these companies did not improve in the first quarter (Q1) – July-September – of the current 2020-21 financial year either.
There are four companies in the paper and printing sector listed in the capital market, three of which are involved in the paper and tissue business. A company is doing business in the packaging sector.
In the Q1 of the current fiscal year, one of these companies went through a trend of loss as it did last year while another witnessed a loss lower than that of last year.
Top officials of paper companies said they did not see any improvement in the Q1 earnings and profits due to the closure of educational institutions.
Although July to December is usually the peak time for selling papers or accessories, the situation is different this year, they also said.
Bashundhara Paper Mills Limited is one of the largest companies listed in the capital market.
The company that raised a capital of Tk200 crore by issuing shares produces tissue, paper and hygiene products and sells them in the domestic market as well as exports abroad. Bashundhara Paper Mills accounts for more than 75% share of the country's tissue market.
In the Q1 of 2020-21, the profit of Bashundhara Paper dipped by about 57% compared to that during the same period last year. Its profit in the Q1 of this fiscal year stood at Tk5.18 crore, down from Tk11.75 crore year-on-year.
In the Q1, the company's earnings per share (EPS) was Tk0.30, down from Tk0.68 in the same period last year.
M Majedul Islam, company secretary of Bashundhara Paper Mills, told The Business Standard, "Profits are declining as schools, colleges and universities are closed. Although the paper business has shrunk, the company has made a good amount from tissue or hygiene product business."
Another company, Sonali Paper & Board Mills Limited (SPBML), is now manufacturing various grades of paper. It also produces paper board, box board, duplex board, triplex board, cardboard, coated board, packing board, file board, corrugated board, etc.
In the Q1, Sonali Paper's profit dropped by about 12% to Tk1.15 crore. Its EPS fell to Tk0.69 from Tk0.86.
Hakkani Pulp & Paper Mills Ltd produces tissue, writing paper, newsprint paper and fluting media paper.
The company posted a profit of Tk4.17 lakh in the Q1 of the current financial year, with an EPS of Tk0.022. During the Q1 in the last fiscal year, the company faced a loss of Tk0.22 per share.
Khulna Printing & Packaging Ltd manufactures packaging materials. The company registered a loss of Tk58.5 lakh in Q1 and a loss of Tk0.08 per share. At the same time last year, the company had a loss of Tk2.80 crore, including a loss of Tk0.38 per share.
Milon Khan, company secretary of Khulna Printing and Packaging, said the company had already lost its business rhythm but Covid-19 accelerated it.