Struggling Ring Shine Textiles has reported a loss of Tk 396 million for July-September quarter this year, despite a rise in revenue.
The company also suffered a loss of Tk 430 million in the same quarter last year, according to a filing with the stock exchange on Thursday.
As a result, the company's earnings per share (EPS) were negative Tk 0.79 for the quarter this year, as against negative Tk 0.86 in the corresponding period of 2023.
The company explained that the EPS has improved due to 137 per cent growth in exports during the July-September period compared to the same quarter last year.
The company's revenue also grew 137 per cent year on year to Tk 645 million for July-September quarter this year. However, the company's production costs surged by 55 per cent to Tk 761 million, resulting in higher production expenses than sales during the period.
The higher production costs were primarily attributed to challenges in securing essential raw materials, stemming from difficulties in opening letters of credit (LCs).
The company has been incurring losses for more than four years. Over the past four financial years -- FY21 to FY24 -- the company accumulated a total loss of Tk 4.45 billion.
The company had distributed a 15 per cent stock dividend during its listing year in 2019. For the last four years, the company failed to pay any dividend.
Why Ring Shine ran into trouble
Ring Shine Textiles was the first big manufacturing company that raised Tk 1.50 billion under fixed-price method in 2019. But after its listing on the stock market, the company could not do business properly due to numerous irregularities.
The company raised its paid-up capital from Tk 99.50 million to Tk 2.85 billion by issuing pre-IPO shares, known as placement shares, to the then sponsors, directors, and 73 external local shareholders.
However, 11 sponsor-directors and 33 external shareholders did not make any payments against their allotted shares.
Besides, soon after its listing, the Covid-19 pandemic broke out and the company fell into a crisis due to a lack of demand for its products from foreign buyers.
Ring Shine mainly manufactures dyed yarn and gray and finished fleece fabrics of various qualities for both local and international markets.
Working capital shortfall, decline in orders from buyers, and raw material shortage led to the factory shutdown since September 2020.
The regulator restructured its board in January 2021, appointing seven independent directors to observe the company's overall condition and make a plan on how to salvage the company out of its misery.
In June 2021, the factory went back into production partially.
In September this year, the securities regulator formed a five-member investigation committee to examine irregularities in raising funds for Ring Shine Textiles.
The company's stock closed at Tk 4.1 on Thursday, losing 2.44 per cent over the day before.
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