For Golden Harvest, the pioneer in Bangladesh’s frozen food business, the July-September quarter this year was diametrically opposite from last year.
The company posted a loss of Tk 7.4 crore in the three months in contrast to a profit of Tk 7.2 crore a year earlier.
Between July and September, the company’s sales stood at Tk 11.8 crore, down 56.2 per cent year-on-year.
“The pandemic has been a mixed bag for us,” said Ahmed Rajeeb Samdani, managing director of Golden Agro Industries.
On one hand, the demand for its frozen parathas and bread shot through the roof, but its other frozen food items like nuggets, sausages, samosas, chips as well as ice cream were hardly sought after by consumers.
Golden Harvest sells to three segments -- households, schools and hotels and restaurants, which account for 36 per cent of its sales.
“When the pandemic began in March, our revenue from two of those segments were gone for all intents and purpose.The hotels and restaurants are slowly welcoming back visitors now, but the schools are closed still.”
Golden Harvest provides breakfast sausages, nuggets, chips and other frozen food items to all upscale hotels and guesthouses in Bangladesh, according to Samdani.
Then the supermarkets have hoarded products from Golden Harvest anticipating supply disruptions during the countrywide shutdown enforced by the government from March 26 to May 30 to tame the fast and furious spread of coronavirus.
“When things have neutralised in June, those stock still served them and they did not place big orders.”
Another reason the company’s sales in the quarter has been lacklustre is that the pandemic has created a multitude of new entrepreneurs supplying homemade frozen food items to supermarkets and at rates much cheaper than that Golden Harvest can manage, Samdani said.
“This has created additional competition for us,” he said, adding that were there strict quality control and regulation in the country those items would not have made it to the supermarket shelves as those are not preserved properly.
But the demand for its bread and paratha has held up well even after life have returned to a version of normality and amid the on
“We can’t supply these two items fast enough.”
So much that the frozen food processor is set to roll out an automated paratha production line over the next fortnight.
The company is also set to roll out a ready-to-eat line of tehari and morog polao as well as an app to place orders for Golden Harvest products.
“We have taken a host of business decision amid the pandemic keeping in mind the ‘new normal’ reality. Their reflection would be in the next quarter’s result, hopefully.”
But one segment that is unlikely to show any improvement is ice cream.
Sales of one of its subsidiaries, the BLOOP-brand ice cream, is unlikely to return to normal until March next year.
Pohela Boishakh is the biggest sales event for the ice cream industry. At the beginning of the year, Golden Harvest had an ice cream sales target of Tk 18 crore for the month of April. But it made only Tk 36 lakh, according to Samdani.
“We have been a victim of disinformation. Many schools were giving out flyers to parents to not let their children have ice cream or else they would get COVID. This killed our sales when globally ice cream consumption soared as people stayed in, binge-watched and ate ice cream.”
From July onwards, ice cream sales have picked up but it is nowhere near the pre-pandemic level.
“By default, ice cream sales will spring back when schools and colleges reopen. All ice cream makers are waiting for that.”
Samdani says it would take another six months for Golden Agro’s sales to fire on all cylinders.
The damage caused by the three months of the pandemic badly dragged downGolden Harvest’snumbers for the 2019-20 financial year: it logged in profit of less than Tk 1 crore for the year. The company had posted a profit of Tk 24.3 crore in its 2018-19 financial year. Golden Harvest Agro’s financial year runs from July to June.
Subsequently, the company, which was listed in 2013, announced no dividend for the 2019-20 financial year.
Shares of Golden Harvest closed at Tk 16.7 yesterday.