Peninsula in the red for first time since listing

The Peninsula Chittagong's earnings turned negative for the first time in FY23 after its listing on the stock exchanges mainly for an escalation in finance expenses and cost of goods sold.
It reported a loss of Tk 0.34 per share for FY23, as opposed to a profit of Tk 0.19 per share for the previous fiscal year, according to a stock exchange filing on Sunday.
Yearly income plunged also because the listed hotel has been pouring money into the construction of a second five-star hotel adjacent to Hazrat Shah Amanat International Airport in Chattogram, said company secretary Mohammed Nurul Azim.
The investment is partly from own source and party from bank borrowing. At present, the company has bank loans amounting to around Tk 1 billion, Mr Azim said.
"Our second hotel in Chattogram is almost ready. Once the hotel is open for guests, the company will return to high profit as it is part of the company," he added.
The company's board declared no dividend for its shareholders for FY23, which is also a first time since the 2014 listing.
The Peninsula did not disclose the annual revenue data yet. But its nine months' revenue was Tk 292 million until March this year, generating from the hotel business tied to room and space rent and sales of food & beverages.
The company secretary said 37 per cent year-on-year rise in finance cost and 19 per cent jump in the cost of goods had wiped out profit.
"Due to the high inflationary pressure, prices of all food products increased substantially in the global market, but we could not increase the selling prices of food items in line with the price hikes," he said.
The rising foreign exchange rate elevated finance expenses, leading to a spike in cost of sales.
Moreover, administrative expenses soared more than 22 per cent year-on-year to Tk 65 million in FY23.
At the same time, the company's earnings from bank fixed deposits and the stock market shrank, pushing income from non-operating segment into the red.
Mr Azim said the hotel had paid dividends to shareholders even for FY20, when its business was hit hard by social restrictions and lockdowns imposed to contain Covid-19, from retained earnings.
The company will hold an annual general meeting virtually on December 18. The record date is November 9.
Its net asset value per share stood at Tk 28.88 for FY23, down from 29.47 a year earlier.
The net operating cash flow per share (NOCFPS) went up to Tk 0.97 in FY23, from Tk 0.32 a year ago due to control over inventories and improvement in receivables, while payment to suppliers decreased.
Meanwhile, the company's stock has remained stuck at Tk 27.40 since November last year.

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