Profit drops 20.7% in the financial year that ended on June 30
The Agricultural Marketing Company Limited (AMCL), a subsidiary of the Pran-RFL Group, saw its profit shrink 20.7 per cent in its financial year that ended on June 30 as the countrywide shutdown dried up demand for its beverages.
The company, which sells fruit drinks, carbonated beverages, bottled water and mango bars, yesterday announced a profit of Tk 4.6 crore for its 2019-20 financial year.
“Our earnings fell simply because our sales dropped for the pandemic,” said Kamruzzaman Kamal, director of marketing of Pran-RFL Group.
Coronavirus could not have arrived at a worse time for the company.
In Bangladesh, the first confirmed cases of coronavirus were announced on March 8 and the government put the country on general shutdown three weeks later. The shutdown was lifted on May 30.
The peak season for beverage sales is from March to July.
“And we missed a large chunk of the peak season for the pandemic,” he said, adding that the drop in sales revenue was so high that it could not be overcome by cost reduction.
Many of the products are manufactured targeting the village population and the shutdown had ruptured rural distribution.
The global pandemic also affecting the company's beverage export to India, the Middle East, Nepal and other countries.
The crash in sales was partly attributed to the widespread fake news that consumption of cold drinks could make consumers more susceptible to COVID-19.
The World Health Organisation (WHO) has not issued any warning on cold drinks. The United Nations' public health agency even said there is no scientific evidence that eating hygienically made frozen food and ice cream spread the new coronavirus.
So, people still refrained from purchasing beverages even after the shutdown was lifted.
“Now the situation is better than before. But this is a lean season,” Kamal said, adding that the company has to wait until March, when the mercury rises again.
The company yesterday announced a 32 per cent cash dividend for the year, which is the same as in the previous five years.
The disclosure failed to lift its share price.
Shares of AMCL closed at Tk 189.5 on Tuesday, down from Tk 191.3 the previous day.