Bangas’s profit crumples 70% when the biscuit market was happily munching

Bangladesh seems to have lost the taste for Bangas biscuits, the doyen of Bangladesh’s organised biscuit sector.

The company saw its profit fall a staggering 70.9 per cent to about Tk 0.5 crore in its 2019-20 financial year, it announced on Thursday.

The financial year, which concluded on June 30, overlapped with the coronavirus-induced lockdowns in much of the world, a development that benefitted biscuit makers everywhere as people munched on biscuits while stuck at home.

Bangas’s fellow listed biscuit maker, Olympic Industries, saw its profit leap 8.2 per cent to Tk 202.5 crore in its 2019-20 financial year.

Even with the lockdown lifted and the economy opening up, consumers seem to have not lost the appetite for Olympic’s biscuits, which include popular names like Energy Plus, Tip, Nutty, Hilux and First Choice: between July and September, its profit edged up 2.2 per cent year-on-year to Tk 57 crore.

Bangas blamed its underwhelming performance in the 2019-20 financial year -- for which it announced a 5 per cent cash dividend in contrast to a 5 per cent cash and a 5 per cent stock dividend in the previous year -- on the pandemic and increasing production costs.

“Our production, sales and distribution were affected by the pandemic,” Md. Ekramul Haque, company secretary of Bangas, told Dhaka Tribune.

Bangas's raw materials are mainly imported from China, where a coronavirus outbreak in its Hubei province in January had left large swathes of its factories as desolate as a ghost town at the beginning of the year. 

When normal service resumed in China around March, the rest of the world, including Bangladesh, was in lockdown.

That hampered Bangas’s production and hence the shrinking bottom line, Haque added.

Even in the pre-pandemic world Bangas, which has been manufacturing 20 types of biscuits and cookies for more than three decades now, seems to have lost its way in recent times.

In the first nine months of the 2019-20 financial year, its earnings per share, which its profit divided by the outstanding shares of its common stock, stood at about Tk 0.9, down from Tk 3.3 a year earlier.

Bangas’s decline, it appears, is firing up Olympic’s rise.

For instance, Olympic, which has gone on to become the country’s leading biscuit manufacturer in recent years, this week announced a fresh investment plan of Tk 42 crore to expand its production capacity and introduce more premium variety cracker and hard dough biscuits.

Bangas’s stock, which has been listed since 1984, is not doing better year: in the past two years, it lost 61.4 per cent in value.

Yesterday, its shares closed at Tk 126.6, up 1.2 per cent from the previous day.