MI Cement, one of the leading cement manufactures in Bangladesh, saw 6.49 per cent growth in utilisation of production capacity for the fiscal year (FY) 2016-17 compared to previous FY.
The company's installed capacity is 1.74 million MT and in 2016-17 the actual output stood at above 1.56 million MT, which was 6.49 per cent higher than the output achieved in 2015-16.
The company displayed an upward trend in achieving output during 2012-13 to 2016-17.
Following the enhanced production, the company witnessed sales worth above Tk 9.43 billion in 2016-17 against above Tk 9.01 billion of 2015-16.
Subsequently, the company's revenue rose 4.69 per cent to close at above Tk 9.43 billion in 2016-17.
But due to increased cost of sales and selling and distribution expenses, the profit of MI Cement declined marginally in 2016-17 amid enhanced production capacity and increased revenue earnings.
During the fiscal year, the company's net profit declined 11.17 per cent to close at above Tk 661.07 million against Tk 744.24 million in 2015-16.
Masud Khan, chief executive officer of MI Cement, said it takes some time to reap the actual outcome after enhancing a company's production capacity.
"Quality is our strength and the outcome of increased production capacity will be visible in near future," Masud Khan said.
He said during October-December, 2017 their company's market share was around 8.5 per cent in domestic market.
"Our target is to ensure above 10 per cent market share in line with our vision 2020," Masud Khan said adding that MI Cement is the biggest supplier of mega projects like Padma Multipurpose Bridge.
The company has reported earnings per share (EPS) of Tk. 4.45, net asset value per share (NAV) per share of Tk. 47.80 and net operating cash flow per share (NOCFPS) of Tk. 1.73 for the year ended on June 30, 2017 as against Tk. 5.01, Tk. 45.29 and Tk. 10.68 respectively for the same period of the previous year.
The board of directors of MI Cement recommended 20 per cent cash dividend for the year ended on June 30, 2017.
The company's cost of sales increased 6.41 per cent to close at above Tk 7.82 billion for 2016-17.
The company's selling and distribution expenses also rose 13.25 per cent to close at above Tk 399.79 million in 2016-17.
In 2016-17, the company's export sales rose 14.18 per cent to close at above Tk 490.64 million, while the domestic sales increased 4.22 per cent to close at above Tk 8.94 billion compare to previous year.
"Despite an increase of 4.69 per cent on turnover, cost of sales increased in 2016-17 compared to that of the previous year mainly brought about by escalation in prices of clinker and other cementitious materials," the MI Cement mentioned in its financial statement for 2016-17.
Faced with intense competition including significant brand spend by the competitors and the continued need to invest in building the brand, selling and distribution expenses increased in 2016-17 compared to last year, MI Cement said.
"Despite the adverse factors, decline in operating profit was contained at 7.22 per cent with control over other areas of cost," MI Cement added.
The company reported its retained earnings worth above Tk 1.99 billion for 2016-17 against above Tk 1.59 billion for 2015-16.
MI Cement, an 'A' category company, started its journey on December 31, 1994 and was listed on the stock exchanges in 2011. The company's paid-up capital is above Tk 1.48 billion.
According to information of Dhaka Stock Exchange (DSE), sponsor-directors own 67.08 per cent shares of MI Cement, while institutions hold 17 per cent shares, foreign shareholders 0.32 per cent shares and general shareholders 15.60 per cent shares as of December 28, 2017.
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