Monday, May 20, 2024

Walton sees Tk 566cr sales drop in six months

Business Desk : dhakamirror.com

Walton Hi-Tech Industries PLC, the largest electrical, electronics and home appliance manufacturer in Bangladesh, posted lower sales and profits in the first half of the current financial year due to higher inflation and the dearer US dollar amid the ongoing global economic crisis.

The sales dropped by Tk 566 crore, or 17.95 per cent, to Tk 2,586 crore in July-December of 2022-23.

In the same half, profits plunged 96 per cent year-on-year to Tk 14 crore. Thus, its earnings per share (EPS) stood at Tk 0.47, way lower than the Tk 14.73 it recorded in the same period of the previous financial year.

Singer Bangladesh, another listed electric, electronics and home appliance maker, saw its full-year profits decline 86 per cent year-on-year to Tk 7.3 crore last year.

A top official of Walton Hi-Tech Industries said Walton did not see such a tough period even during the peak of the coronavirus pandemic.

“The war-induced economic slowdown and uncertainty have hit the global economy hard.”

He said as higher inflation persists and people fear that the overall economic situation may not return to normalcy anytime soon, consumers are focusing on basic products.

“Electronics and home appliance products are not basic goods, so the sales of these products were in a tight situation in the last six months.”

Walton is the leading electrical and electronic company in Bangladesh with more than 70 per cent market share. It also exports products to more than 40 countries under the brands Walton, Marcel and Safe.

The profits decreased due mainly to the pandemic-induced impacts and the fallout of Russia’s invasion of Ukraine, the company said in its financial reports.

The global economy continues to be weakened through significant disruptions in trade and food supply.

There were fuel price shocks. All of these factors contributed to higher consumer prices and tightened the global market condition.

The depreciation of the local currency against foreign currencies as a post-pandemic effect has increased material costs drastically, leading to the overall decline in profitability, Walton said.

In addition, value-added tax has been imposed on the supply of refrigerator products. Still, the operating profit of the company stood at Tk 544.9 crore.

However, profit after tax dropped drastically due to the fall of the taka against the US dollar and the increase in interest rate, said the financial reports.

The taka has lost its value by about 25 per cent against the American greenback in the past one year owing to a fast depletion of foreign currency reserves.

Walton’s finance cost was Tk 469 crore in July-December, up nearly six times than Tk 83 crore in the same period in FY22.

Shares of Walton Hi-Tech Industries were unchanged at Tk 1,047 on the Dhaka Stock Exchange yesterday. The company’s paid-up capital stands at Tk 302 crore.

The company disbursed a 250 per cent cash dividend to its shareholders for the year that ended on June 30, 2022.

Sponsors of the company hold 99 per cent shares, while the rest is held by institutional investors, foreign and retail investors, DSE data showed.

– With The Daily Star input

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