The troubled National Tea Company (NTC) experienced losses of Tk 700 million in FY24, the fifth year in a row that it remains in the red, amid an acute shortage of working capital and a rise in production cost.
This time the loss exceeded that of the previous years.
The company’s production remained closed for 51 days in FY24 as workers continued unrest demanding wages.
As a result, the NTC’s turnover declined to Tk 750 million in FY24 from Tk 958 million the year before.
It experienced a loss in FY20 for the first time. Since then, it remained in the red.
The board of directors has not recommended any dividend for FY24 as for the previous four years.
The NTC experienced a steep decline in the operating cash flow following a decrease in sales and collection.
The net operating cash flow per share (NOCFPS) was Tk 126.18 in the negative for the year ended in June last year, worsened from Tk 96.24 in the negative a year ago.
Meanwhile, the company’s liabilities exceeded its assets by Tk 318 million in FY23.
The NTC has been running operations on a limited scale, with loans taken from Krishi Bank.
The company sought a loan of Tk 460 million from Krishi Bank in October last year and the bank so far disbursed Tk 110 million in two installments.
Insiders said the auction price of processed tea remained almost the same over the last one decade while the production costs increased significantly during the time.
Presently, the auction price of processed tea is above Tk 180 a kilogram while production cost is Tk 230 a kilogram.
The company has been failing to get a better price of its product as its old machinery is unable to ensure quality.
Sufficient capital is required to meet the needs of working capital and modern machinery.
Representatives of the NTC’s board said it would not be possible to revive the company without a complete overhaul and funds.
That possibility looks slim as previous moves to raise capital are hanging in the absence of any strong initiative from the government.
The Bangladesh Securities and Exchange Commission (BSEC) had allowed the company to raise a capital worth around Tk 2.80 billion by issuing placement shares to the existing shareholders.
Of the government entities, the Investment Corporation of Bangladesh (ICB) is a major shareholder of the company. It is in doubt over whether to invest in a company that is sinking, said ICB Managing Director Md. Abul Hossain.
The Corporation has sought an opinion from the Ministry of Finance regarding further investment in the NTC.
Meanwhile, the stock of the NTC experienced a steep fall since September last year and closed at Tk 190.30 per share on the Dhaka bourse on Sunday. https://thefinancialexpress.com.bd/stock
