Phoenix Finance in the red, asset value turns negative

Phoenix Finance and Investments endured a loss of Tk 2.23 billion in January-June this year due to high provisioning and shrinking income from the ailing stock market.
The non-bank financial institution (NBFI) made a profit of Tk 1.66 million in the same period a year ago.
The loss per share was reported at Tk 13.42 in the six months through June, as against profit of Tk 0.01 per share in the same period last year, according to a stock exchange filing on Sunday.
The company said the earnings per share was negative due to higher provisioning against loans, advances and investments.
It had not declared any dividend for two consecutive years -- 2021 and 2022 -- for a cumulative loss of Tk 1.74 billion. Listed in 2007, the company paid 12 per cent stock dividend in 2020.
The six months' loss was even 28 per cent higher than the loss incurred in 2021 and 2022, according to the DSE data.
Due to the poor financial performance, the company's stock has been stuck at the floor of Tk 16.30 since September last year.
Phoenix Finance also suffered an operating cash flow crisis. The company has reported a net operating cash flow per share of Tk 1.53 in the negative for the six months through June this year, which was Tk 0.90 in the positive for the same period last year.
The company said net operating cash flow turned negative due to a decline in cash generation from terms and other deposits. Its net asset value also turned negative at Tk 4.28 per share for the period as against Tk 9.18 per share in the positive for the same period a year ago.
"We had to keep higher provision against bad loans, that's why the company incurred a big loss," said company secretary Mohammad Sayduzzaman.
The NBFI had to keep 100 per cent provision against defaulted loans as per Bangladesh Bank's instructions.
Market analysts said the company's profit had been plummeting for more than two years due to irregularities and mismanagement in debt disbursements.
Currently, sponsors and directors of the company hold 30.51 per cent share in the company, whereas institutional investors have 23.63 per cent and the general public owns 45.86 per cent, according to data available until August.

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