Expansions yield dividend for Paramount Textile

Paramount Textile Limited is bracing for a happy time as the textile maker witnessed a 16 per cent year-on-year jump in net profit in the first quarter (July-September) of the current fiscal year, thanks to a massive expansion of production lines.

The publicly traded firm posted Tk 27.47 crore in net profit in the July-September period of the fiscal year 2022-23 against Tk 23.65 crore in the same period last fiscal.

The company this year also registered the highest first quarterly profit in the last five years, and that hefty earnings came during a time when the world economy was facing slowdowns due to the Russia-Ukraine war.

Sources at the company said its profit surged because of its massive investment in the balancing, modernisation, rehabilitation, and expansion (BMRE) project in recent years as well as investments in the power generation business.

Meanwhile, the listed textile company’s revenue grew up by over 50 per cent year-on-year in Q1 of the current fiscal year.

The company in recent years adopted massive expansion plans under the BMRE, and a solid dyeing unit under that scheme became operational recently.

Riding on this new production facility, its production capacity has grown by 16.50 lakh yards of fabrics per month generating an additional $2.5 million worth of monthly revenues, several company officials familiar with the matter said.

After the inception of the new solid dyeing unit, the textile maker’s total fabric production stood at 22.5 lakh yards per month.

The listed company already started reaping benefits from the new production line as its revenue jumped dramatically by 51 per cent in the first quarter of FY23 compared to that in the same period of the last fiscal.

The textile maker logged revenue of Tk 206.9 crore in the July-September period of FY23 against the figure of Tk 136.3 crore in the same period last year.

The revenue earned from the yarn and solid dyed fabric segment stood at Tk 175.10 crore in Q1 this fiscal which was Tk 124.9 crore in the same period of the last fiscal.

On the other hand, the knit yarn dyeing unit generated Tk 10.38 crore as revenue in the latest quarter against Tk 6.22 crore in the corresponding period last year.

Paramount Textile in November 2020 had decided to invest in a 30MW (AC) grid-tied solar PV power plant run by Intraco Solar Power Limited (ISPL).

Then the company purchased 80 per cent of shares of ISPL.

Moreover, this year, the company invested in a 200MW heavy-speed diesel-based power plant at Baghabari in Sirajganj district.

Due to the investment in BMRE and enhancement of production capacity, its revenue jumped significantly, the company stated in the Q1 financial report.

Robiul Islam, company secretary of Paramount Textile Limited told The Business Post that during the Covid-19 period, there had been massive demand for their products.

“Following the growing demands, we expanded our factory facilities, helping increase our income,” he added.

“The power plants are expected to add hefty value to our earnings in the coming years,” Robiul continued.

The company’s power supply segment generated Tk 13.68 crore in revenue in the July-September period of the current fiscal.

The company’s earnings per share (EPS) stood at Tk 1.62 for the July-September period this year against Tk 1.53 for the same period last year.

The EPS for the first quarter in FY21 was Tk 1.51 which was Tk 1.23 and Tk 0.62 for the same period of FY20 and FY19 respectively.

Incorporated in 2006, Paramount Textile produces and delivers woven fabrics with more than 85 per cent of its total income coming from yarn-dyed fabrics.

It owns a 65 per cent state in its subsidiary – Paramount Dredging Ltd – and 49 per cent at Paramount BTrac Energy Limited (PBEL), another concern that went into operation in June 2019.