Premier Cement shares drop over 9%

Premier Cement Mills' shares dropped over 9% after the company reported a 75% decline in net profit for the first quarter of FY25 (July-September).

Yesterday, its stock closed at Tk57.40 on the Dhaka Stock Exchange (DSE), down by 9.89%.

According to a price-sensitive statement filed with the DSE, Premier Cement's profit for the quarter fell to Tk1.44 crore, down from Tk5.76 crore in the same period last year. Revenue also declined by 17% to Tk519.72 crore compared to the previous year.

At the end of Q1 FY25, earnings per share stood at Tk0.14, down from Tk0.54 a year earlier.

Shafiqur Rahman, company secretary of Premier Cement, told The Business Standard that the company faced declining sales in Q1 due to July's market slowdown, which impacted their sales targets and profit margins. 

He added that rising interest rates further squeezed profits. To mitigate this, the company plans to issue preference shares to raise Tk161 crore in low-cost funds to reduce its debt burden.

Earlier, Premier Cement recommended a 21.50% cash dividend for its shareholders for the fiscal year 2023-24. 

The company has scheduled its annual general meeting for 30 November to approve the dividend and audited financial statements.

Despite incurring losses in the fiscal years 2021-22 and 2022-23, Premier Cement had still paid a 10% cash dividend for each of those years. 

According to its disclosure, the company posted earnings per share of Tk7.04 in the last fiscal year, compared to a loss per share of Tk7.99 the previous year.

Currently, Premier Cement has a total daily production capacity of 19,040 tonnes, placing it close to the market leader, Shah Cement.

Premier Cement was listed in the stock market in 2013 under the proprietorship of TK Group and GPH Group. That year, it sold shares to investors for Tk22 with a premium of Tk12.