Despite securing a steep growth in operating profit, Sonali Paper & Board Mills experienced a 20 per cent decline in net profit year-on-year to Tk 124.79 million in FY24.
The income shrank mainly because of the company's lower profit from the secondary market.
However, the company has maintained a consistency in the recommendation of dividends for FY24 with the previous two years. The board of directors has recommended 40 per cent cash dividends for FY24.
Sonali Paper has a significant investment in the secondary market. As the market turned volatile, the company's income from this segment turned Tk 91.53 million in the negative in FY24, against an income of Tk 140 million the year before.
"Our profit from the core business remained unaffected. The erosion in the portfolio of the secondary market has squeezed our profit in FY24," said Md. Rashedul Hossain, company secretary of Sonali Paper.
The other income of Sonali Paper comes from bank interest, investments in securities, and dividends.
The company's income in the form of bank interest escalated 80 times year-on-year to Tk 21.73 million in FY24 following the interest rate hikes.
Sonali Paper, a concern of Younus Group, produces white and printing papers, simplex papers and duplex papers. In August last year, it started producing aluminium foil paper boxes from a new product line.
Aluminium foil containers are used in family banquets and in the packaging of food items, such as airline snacks and western-style pastry baking, in shapes and sizes preferred by customers.
The company's operating profit jumped 145 per cent year-on-year to Tk 345.42 million in FY24.
The company secretary said a rise in the sales of two products -- paper and aluminum foil paper boxes were the main drivers of the jump in the operating profit.
As a result, the company's sales and collections increased, and so does the operating cash flow.
Sonali Paper has reported a net operating cash flow per share (NOCFPS) of Tk 10.39 for FY24, up from Tk. 7.47 reported for the previous year.
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