Publicly listed company Navana CNG has posted a fall in its half-yearly profits amid increasing interest expenses.
Net profits of the company dropped to Tk3.9 crore in the July-December 2019 period as compared to Tk5.6 crore in the same period of the previous year in spite of revenue jumping to Tk326.5 crore from Tk252.9 crore in the respective periods.
Navana CNG has been burdened with increasing debt, according to the first half yearly financial report of the company in fiscal year 2020.
The interest expenses increased Tk6.8 crore during the half year, eating away profits of the company.
High interest expenses started to accumulate with an increase in the company debt level witnessed in the previous year.
During the fiscal year 2019, the company's finance cost grew 131.5 percent to Tk62.4 crore riding on the back of short term loan worth Tk290.59 crore and long-term loan worth Tk446.43 crore.
These loans include Tk297 crore from City Bank, Tk88.2 crore and Tk118 crore from Shahjalal Islami Bank, and Tk106.5 crore from One Bank.
Long-term loans from City Bank and Shahjalal Islami Bank were taken for Navana LPG project while the loan from One Bank was for Navana Engineering Ltd.
The new subsidiary project of the company, Navana LPG Ltd, retained an earnings loss of Tk11 crore in fiscal year 2019.
The LPG project reported a net loss of Tk4.33 crore in fiscal year 2019, which was Tk6.71 crore in the previous year.
Another subsidiary, Navana Welding Electrode posted a net profit of Tk4.07 crore in fiscal year 2019, which was Tk2.93 crore in the previous year.
Besides the above, net profit of Navana Engineering stood at Tk0.53 crore in fiscal year 2019, which was Tk13.21 crore in the previous year.
LPG project of Navana CNG is in the beginning stage and the net loss of the project has been reducing gradually as well, said the company secretary Mohammad Fakrul Islam to The Business Standard.
"Most of the activities of our companies are slowing down amid the ongoing shutdown and I have not gone to the office for almost two months," he added.
The company recommended a cash dividend of 10 percent in the fiscal year 2019 as compared to a cash dividend of 12 percent in the previous year.
Navana CNG Ltd is a sister concern of Navana Group, which was incorporated in April 2004.
The principal activities of the company are the conversion of petrol and diesel-driven vehicles to Compressed Natural Gas (CNG) driven vehicles, CNG refuelling stations and other related services.
Navana CNG is currently running 19 CNG refuelling stations and 8 CNG conversion workshops located at various locations in Bangladesh.
The company was listed on both the Dhaka and Chittagong stock exchanges in 2009. The last trading price of each share of the company at the Dhaka Stock Exchange was Tk33.20.