Ring Shine Textiles has reported a loss of Taka 396 million for the July-September quarter of this year, despite achieving higher revenue figures. This loss reflects an improvement over the same period last year, when the company recorded a loss of Taka 430 million, according to a recent filing with the stock exchange.
Revenue for the quarter rose by 137 per cent year on year, reaching Taka 645 million. However, production costs surged by 55 per cent to Taka 761 million, resulting in total expenses exceeding sales revenue for the period. The increasing production costs were largely due to difficulties in securing essential raw materials, which has been exacerbated by challenges in opening letters of credit (LCs).
The company, which raised Taka 1.50 billion under a fixed-price method in 2019, has faced numerous challenges since its listing on the stock market. Following its public debut, the Covid-19 pandemic severely impacted demand for its products from foreign buyers. Ring Shine primarily manufactures dyed yarn and a variety of gray and finished fleece fabrics for both domestic and international markets.
A significant working capital shortfall, a decline in orders, and a shortage of raw materials have resulted in factory shutdowns since September 2020. In response to these ongoing issues, the regulator restructured the company’s board in January 2021, appointing seven independent directors to monitor operations and formulate a recovery plan.
Partial production resumed in June 2021, but the company’s challenges have persisted. Recently, in September, the securities regulator established a five-member investigation committee to probe irregularities related to Ring Shine Textiles’ fundraising efforts.
