MI Cement Factory Limited, manufacturer of the brand Crown Cement, has recently disclosed its board’s decision to purchase more land adjacent to its factory located in Munshiganj.
The declaration came at the company’s 141st meeting held at its head office on Saturday.
The board said the land is about 392 decimals at West Mukterpur, Panchasor in Munshiganj, which will approximately cost a total of Tk15.56 crore, including the registration fees.
The company previously bought lands adjacent to its factory premises of 53.22 decimals worth Tk3.28 crore in 2012 and 27.67 decimals worth 1.63 crore in 2012.
The purchase of land is for expansion of the capacity in future, and therefore, investors would have to wait to enjoy yields from the investment, said Md Mozharul Islam, the company’s secretary.
Replying to a question whether the investment would reduce the chances of paying out cash dividend, he told the Dhaka Tribune that it would not affect the dividend.
On May 18, the company announced its intention to set up two packing units that would cost approximately Tk21 crore, including civil construction.
Earlier on March 31, the cement producer had a cash and equivalent holdings of Tk319 crore, according to the third unaudited quarterly statements in FY14. Of the amount, Tk306 crore is deposited with banks and Tk13 crore kept in hand and banks.
Analysts believe the cash holding ratio against term deposit caused a fall in profit in the Q3 of FY14 against the same period of FY13.
The company has reported a quarterly profit drop of 12% for the quarter ended on March 31 against the same period last year.
The financial statement shows the quarterly profit of FY14 dropped to Tk13.6 crore from Tk15.5 crore during Q3 of FY13 due to increased financial expenses on bank loans – Tk10.3 crore in Q3 of FY14.
In contrast to quarterly performance, the company’s last nine-month profit is Tk47.1 crore against a profit after tax of Tk44.6 crore during the same period of the previous fiscal, FY13.
The disclosure about land purchase, published at the country’s bourses yesterday, however, failed to move the company’s share prices as investors took the stance of wait-and-see, said a broker.
It might be because the disclosure is unlikely to boost the company’s profitability any time soon, he added.
The stock’s closing price remained same at Tk83.6 each as its closing price at the end of last week.
