Beach Hatchery posts unusual 139% profit growth in 9 months
The company mainly produces white fish such as Tilapia, Koi, Pangas, and Pabda in its Teknaf-based project
Beach Hatchery Ltd – a publicly listed agro-based company – has reported an unusually high profit in the first nine months (July-March) of the current fiscal year (FY25), citing increased demand for its fish in Cox's Bazar.
However, market insiders have described the profit as "unrealistic and suspicious."
From July to March, the company posted revenue of Tk37.32 crore, a sharp 96.73% increase from Tk18.97 crore during the same period of FY24. During this time, the company's net profit surged to Tk18.96 crore, up from Tk7.94 crore a year earlier. Its earnings per share (EPS) stood at Tk4.58, compared to Tk1.92 in the same period of the previous fiscal year.
Despite these impressive figures, market insiders have expressed serious concerns, pointing out that a 51% profit margin in the fish farming business is highly unusual in the context of Bangladesh's agro sector. They noted that even when the company was operating at full capacity in the past, it never recorded such revenue or profit levels.
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On Tuesday, its closing share price stood at Tk56.50, a decrease of 6.30% on the Dhaka stock exchange. On 11 March, its share price was Tk124.40.
On 25 March, the securities regulator directed the DSE to investigate the sharp rise in share prices and trading volumes of Beach Hatchery, which is ongoing.
Some analysts suspect that manipulation of share prices may be taking place through the creation of artificial demand on the trading platform, especially at a time when the overall stock market is experiencing a slowdown. They called on the stock market regulator to investigate the company's highly optimistic disclosures to protect the interests of general investors.
In a disclosure to the stock exchange on Tuesday, the company attributed its profit growth to several internal developments. It said the successful introduction of various types of white fish fingerlings led to increased demand. Being the only white fish hatchery in Cox's Bazar district, the company claimed there is strong local demand for its fingerlings.
Moreover, Beach Hatchery has reportedly reduced feed costs significantly by producing 60% of its fish feed in-house, which has contributed positively to its profitability.
Company Secretary Md Nur Islam said that demand for local fish varieties has grown in Rohingya-affected areas, as many non-governmental organisations (NGOs) are operating there. The company cultivates both mature fish for sale and fingerlings, while also partially producing its own feed.
Currently, the company is farming fish in 42 out of its 110 ponds. We are gradually working to make the rest of the ponds arable and plan to cultivate fish in those as well, he said.
He further mentioned that Beach Hatchery has another project in Chandpur, where white fish are also being cultivated for sale. He noted that the company incurs no marketing or distribution costs, as most of the products are consumed in the nearby areas. Additionally, they can sell their products at relatively high prices, which has improved their profit margin.
Beach Hatchery mainly produces white fish such as Tilapia, Koi, Pangas, and Pabda using intensive aquaculture methods in its Teknaf-based project.
The company resumed production in June 2021 after a five-year break. Earlier, its core operations were based in Teknaf, but in 2016, the government acquired its land for the construction of a marine drive road, forcing the company to shut down operations on 24 April 2016.
In 2019, the company attempted to diversify its business by using Recirculating Aquaculture System (RAS) technology through a turnkey agreement with a Norwegian company. As part of the expansion, it leased 101.19 acres of land in Trishal upazila, Mymensingh, aiming to produce Tilapia, Pangas, Koi, Sarpunti, and other species. However, that project ultimately failed.
