Walton posts lower profits in Q1
Walton Hi-Tech Industries, among the country's leading electronics producers, yesterday said its profits declined in the first quarter of the ongoing fiscal as consumers continue steadily to spend cautiously amid the ongoing Covid-19 pandemic.
The business's earnings per share fell 12 percent year-on-year to Tk 13.26 in the July-September period, down from Tk 15.07 in the same period this past year, according to a posting on the Dhaka STOCK MARKET website.
As well, Walton's net profit dropped 12 percent year-on-year to Tk 401.71 crore.
Although the neighborhood electronics maker registered lower sales in the last couple of months, its share price rose to Tk 837.20 by yesterday, a 7.5 % increase compared to that your the day before.
"The company gets the potential to recover its lost sales in the upcoming quarters if another wave of the Covid-19 infections does not occur. If so, the stock price will rise," Rahat Ali, a stock investor, said after Walton's disclosure.
"People were reluctant to pour money into luxury products, so Walton's sales fell," he added.
The drop in sales was mostly because of reduced demand for refrigerators and air conditioners. Sales in this segment dropped 9 % to Tk 1,265 crore when compared to the same period the prior year, the company's financial report shows.
Both local and international demand for the products declined as a result of the economic uncertainty as a result of the Covid-19 as people are now reluctant to invest big in luxury items.
Therefore, decreased sales were a common sight for the sector, be it in the local or international market, said Abul Bashar, additional managing director of Walton Hi-tech Industries.
Air-conditioner and refrigerator sales were hit due to a general disinclination towards cold water and air amid the ongoing crisis.
"But the situation changes after the pandemic ends," he added.
According to another senior official of the business, televisions, refrigerators, and different other electronics aren't luxury products because they are all now part of someone's daily needs.
"People wished to stay at home through the entire quarter in order to avoid infection and so, our overall sales dropped," he said.
The sales of televisions, kitchen appliances, and other personal electronics rose 13.24 % to Tk 307 crore as well.
Besides, thanks to less tax regime, the newly listed company's cost of funds against loans dropped 19 percent to Tk 35.15 crore.
"In today's quarter, both our domestic and international sales are sufficient," the state said, adding that Walton faced some issues in exporting to Indian markets, but the challenge would soon be resolved.
"Our exports to India increase in the coming years," the Walton official said.
If the next wave of coronavirus happens, Walton will try to cope with the problem and face any new challenges in progressive ways, he added.
Walton raised Tk 100 crore from the stock market this year.
Its per-share net asset value stood at Tk 278 by September 30 while it was Tk 261 on a single date the prior year. Walton declared 200 percent cash dividends for general investors while for directors, it could be 75 % for the year that ended on June 30, 2020.
While Walton posted a drop in sales, Singer Bangladesh, another listed electronics company, recorded higher profits in the first quarter.
In the July-September period, Singer's earnings were Tk 627 crore against about Tk 540 crore through the same period the previous year. Its net profit also rose to Tk 45.7 crore from Tk 43.9 crore as well.
Regardless of the turnaround though, Singer failed to recover its lost sales of the April-June quarter. Sales stood at Tk 1,226 crore in the January-September period, which was still Tk 100 crore short of this a year ago.
