Despite recovery in Q2, Lovello’s half-yearly profit falls

Taufika Foods and Agro Industries, producer of ice-cream brand Lovello, reported lower profits for the July-December period of last year just before its debut on the stock market.

The ice-cream maker logged profits of Tk 2.74 crore for the last six months of 2020, which was 24 per cent lower compared to the same period the previous year, according to data from the Dhaka Stock Exchange (DSE).

However, its profit jumped 215 per cent to Tk 69 lakh in October-December period last year compared to the same period of the previous year.

The country's premier bourse also informed yesterday that the newly listed company's stocks are going to be traded at the DSE from today under the name of Taufika.

"Many companies in the sector failed to make any profit due to the pandemic, but we were able to log some. Our profits fell because of the pandemic-induced drop in demand," said Md Ekramul Haque, managing director of Taufika Foods and Agro Industries.

Almost all ice-cream makers saw their sales drop in the July-December period as many consumers were reluctant to have ice-cream in fears that it might increase the risk of being infected with Covid-19. This rumour took a toll on the market but people eventually realised that ice-cream cannot cause a Covid-19 infection.

In a meeting on October 14 last year, the Bangladesh Securities and Exchange Commission (BSEC) approved the company's initial public offering (IPO) to raise a fund of Tk 30 crore.

Under the fixed price method, Lovello offloaded three crore ordinary shares at Tk 10 each.

The IPO proceeds will be channelled into acquiring a plant, purchasing machinery, freezers and vehicles, increasing storage capacity and to repay loans.

At present, the company has an annual production capacity of 1.80 crore litres of ice cream. Utilisation of the funds within June 2022 will take its production capacity to 2.35 crore litres.

The company has 12 storage depots nationwide with a combined capacity of over 2.80 lakh litres.