The Golden Harvest Agro Industries, the one of the leading frozen food conglomerates, has decided to invest in the fast-growing E-commerce sector. The digital platform of businesses was very much popular amid the pandemic.
Golden Harvest will enhance the business of food, grocery, medicine delivery, bookings, and ticketing, under the E-commerce sector business. The company will own 45 per cent of the venture equivalent to Tk 50 million (5crore).
In the meantime, the company’s paid-up capital is Tk 2.15 billion and authorized capital is Tk 2.50 billion while the total number of securities is 215.83 million.
The sponsor-directors own 32.88 per cent stake in the company while institutional investors own 39.83 per cent, foreign 0.09 per cent and the general public 27.20 per cent as of February 28, 2021, the DSE data showed.
Telling of their new ventures, Ahmed Rajeeb Samdani, managing director of Golden Harvest Group said, “We have actually been in the business of IT-enabled services for 21 years now, so we wanted to leverage that.”
The IT company is rarely known to the country as Golden Harvest InfoTech, works almost exclusively for the export market. It has a client based on Google, Vodafone and hail from Germany, France, the UK and the US.
“So, we thought of using our expertise to address the forward linkage problem in our food business,” Samdani said, adding that the e-commerce venture will take form in 4-5 months.
Meanwhile, the board of directors of the company has declared a 2.0 per cent interim cash dividend for the general shareholders other than sponsor-directors from the company’s reserve-based on audited financial statements for the year ended on June 30, 2020.
The record date for entitlement of interim cash dividend is on April 8, said the disclosure.
It logged in a profit of less than Tk 1 crore for the financial year, which runs from July to June. The company had posted a profit of Tk 24.3 crore in its 2018-19 financial year.
In the first half of its 2020-21 financial year, it logged in losses of Tk 13.6 crore. A year earlier, it posted a profit of Tk 20.9 crore.
The company announced No dividend for the year ended on June 30, 2020. In 2019, it distributed 7.0 per cent cash and 5.0 per cent stock dividend.
The company’s combined earnings per share (EPS) was negative Tk 0.29 for October-December 2020 as against a profit of Tk 0.39 per share for October-December 2019.
In six months, its combined EPS was also negative Tk 0.63 for July-December 2020 against the profit of Tk 0.97 per share for July-December 2019.
The company’s fortune is not shining yet with the opening up of the economy since May 30 last year.
“The pandemic has been a mixed bag for us,” said Ahmed Rajeeb Samdani, managing director of Golden Agro Industries.
On one hand, the demand for its frozen parathas and bread shot through the roof, but its other frozen food items like nuggets, sausages, samosas, chips as well as ice cream were hardly sought after by consumers.
Golden Harvest sells to three segments – households, schools and hotels and restaurants, which account for 36 per cent of its sales.
“When the pandemic began in March, our revenue from two of those segments were gone for all intents and purposes. The hotels and restaurants are slowly welcoming back visitors now, but the schools are closed still.”
Golden Harvest provides breakfast sausages, nuggets, chips and other frozen food items to all upscale hotels and guesthouses in Bangladesh, according to Samdani.
Then the supermarkets have stockpiled products from Golden Harvest anticipating supply disruptions during the countrywide shutdown enforced by the government from March 26 to May 30 to tame the fast and furious spread of coronavirus.
“When things were neutralised in June, those stocks still served them and they did not place big orders.”
Another reason the company’s sale in the quarter has been lacklustre is that the pandemic has created a multitude of new entrepreneurs supplying homemade frozen food items to supermarkets and at rates much cheaper than that Golden Harvest can manage, Samdani said.
“This has created additional competition for us,” he said, adding that were there strict quality control and regulation in the country those items would not have made it to the supermarket shelves as those are not preserved properly.
Then the sales of one of its subsidiaries, the BLOOP-brand ice cream, is unlikely to return to normal until March next year.
Pohela Boishakh is the biggest sales event for the ice cream industry. At the beginning of the year, Golden Harvest had an ice cream sales target of Tk 18 crore for the month of April. But it made only Tk 36 lakh, according to Samdani.
“We have been a victim of disinformation. Many schools were giving out flyers to parents to not let their children have ice cream or else they would get COVID. This killed our sales when globally ice cream consumption soared as people stayed in, binge-watched and ate ice cream,” he reasoned.
Although ice cream sales have picked up from July onwards, it is nowhere near the pre-pandemic level.
“By default, ice cream sales will spring back when schools and colleges reopen. All ice cream makers are waiting for that,” Samdani aspired.
Shares of Golden Harvest, which have been listed since 2013, closed at Tk 16.7, as of 9th March (Tuesday) on Dhaka Stock Market (DSE), which is the same as in the previous session.