Safko Spinning extends factory closure for third time

Safko Spinning Mills has decided to extend the closure of its factory for a third time, according to a disclosure by the Dhaka Stock Exchange (DSE) today (18 August).

Despite the announcement, the company's share price rose by 2.14% to Tk14.30.

The company first suspended production on 12 February this year, citing efforts to reduce losses, with an initial plan to resume operations by the end of March. However, production did not restart as planned, prompting the management to extend the shutdown in phases.

The DSE's inspection team had earlier visited the plant on 3 February and confirmed that the factory was shut, publishing its findings on the bourse's website. 

Later, on 12 February, Safko informed investors that the halt was temporary and subject to improvement in business conditions.

Despite these assurances, the suspension continued. 

In the first extension, the company prolonged the closure until May. In the second extension, it added another two and a half months, pushing the reopening date to 16 August. 

Now, under the third extension, Safko has announced that production will remain suspended until 31 August, with management expressing intent to restart operations afterward.

The extended closure reflects the company's ongoing financial struggles. For the first half of FY2024-25 (July-December 2024), Safko Spinning reported a loss per share of Tk3.09, compared to a profit of Tk2.99 in the same period a year earlier.

The Z category firm has not declared dividends for two years and posted a Tk38.89 crore loss in FY24, its second consecutive year in the red.