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Walton Hi-Tech’s Q1 profit suffers negative trends

  • Staff Correspondent
  • 8 November, 2022 12:00 AM
  • Print news

Walton Hi-Tech Industries PLC's earnings per share (EPS) stood at Tk 1.52 in the July-September period compared to Tk 9.28  of the same period of the previous fiscal year.

Bangladesh's capital market-listed company disclosed the unaudited financial statement for the first quarter of the current fiscal year. It was released after reviewing and approving the report at the company's board meeting held on Sunday.

According to the financial statement, the company's earnings per share (EPS) stood at Tk 1.52 in the July-September period compared to Tk 9.28  of the same period of the previous fiscal year.

As of September 30 of 2022, the company's net asset value per share (NAVPS) stood at Tk 214.75 without revaluation and Tk 318.06 after revaluation.

Besides, Walton's net operating cash flow per share in the first quarter of the current fiscal year was recorded at Tk 36.44 which is 8.42 times higher than the same period last year.

Meanwhile, the company’s operating profit margin during the period ended on 30 September 2022 stood at 18.65 percent which was 18.74 percent in the corresponding period last year.

And financial cost percentage on sales and loans during the same period stood at 21.81 percent and 8.02 percent which were 2.30 percent and 1.20 percent respectively in the comparative period. 

The amount and percentage of finance cost reached significantly higher than comparative period because of devaluation of Bangladeshi Taka against US dollars and the company suffered foreign currency losses during the current fiscal year’s first quarter was amounting to Tk 262.45 crore, which was only Tk 10.11 crore in the same period of the previous financial year. 

In the first quarter, total financial cost was Tk 322.42 crore which was Tk 39.55 crore in the comparative period. As a result, profit/loss after tax during the period ended 30 September 2022 stood at 3.12 percent but in the corresponding period ended 30 September 2021 it was 16.33 percent.

Dwelling on these financial issues, Walton authorities said the recent European geo-political crisis, the global economy continues to be weakened through significant disruptions in trade, food and fuel price shocks, all of which are contributing to high inflation and subsequent tightening in global financing conditions.

Besides, the price hike of material and freight cost, vulnerable global market condition and currency devaluation of Bangladesh’s Taka against US dollars increased material cost dramatically and also led to decline overall profitability of the company.

In addition, VAT has been imposed on the supply of refrigerator products. Overall Bangladesh's economy has been suffering from forex losses on the retranslation of foreign currency monetary liabilities into Bangladeshi Taka and higher inflationary impact than past which leads to decrease the purchase capacity of customers.

All these issues had a disparate impact on increasing the company's financial cost. As a result, the financial profit of the company has been negatively affected in the first quarter of the current financial year compared to the previous year.

The adverse business conditions, including global economic slowdown and geopolitical crisis had negative impacts on profits in the first quarter.

 The company would have been profitable in the first quarter of the current financial year if the US dollar exchange rate had not increased abnormally. And at that time Walton's EPS would have been at least Tk 7.14 and the net profit more than Tk 200 crore.

The Walton authorities hoped that the situation would improve soon and the company would return to profit in next quarters.