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Tiles maker Fu-Wang Ceramic Industries Limited witnessed a 25.5 per cent year-on-year slump in net profit in July-December of the current fiscal year, thanks to a massive surge in production cost.
The publicly traded company’s net profit fell to Tk 1.69 crore in the first half of the fiscal year 2022-23 from Tk 2.27 crore in the same period the year before.
Except for the profit, the ceramic maker’s all other financial indicators, however, remained progressive in the period.
The company blamed extravagant price hikes of raw materials, which consequently shoot up its production cost. As a result, it failed to sustain profit growth in July-December of FY23, according to a filing posted on the Dhaka Stock Exchange (DSE) website Thursday.
The company also announced to pour a big investment of Tk 650 crore in September last year to expand its business which was yet to take off.
The company did not also mention any exact timeframe for the launching of the expansion move.
Fu-Wang Ceramic reported revenue of Tk 45.23 crore in the first half of FY23 which was Tk 40.91 crore in the corresponding period last fiscal.
With this count, the company’s year-on-year revenue rose by Tk 4.32 crore or 10.56 per cent in July-December of FY23.
The company’s earnings per share (EPS) dropped to Tk 0.12 for July-December of FY23 from Tk 0.17 for July-December of FY22, according to the DSE filing.
A Halim Talukder, company secretary of Fu-Wang Ceramic Industries Limited told The Business Post that the reason behind the profit fall was a rise in import costs due to raw materials price hikes as well as currency exchange volatility.
“Due to a surge in import cost, our production costs also went up many times. As a result, we could not maintain the profit growth during the first half of the current fiscal,” he added.
The company in September 2022, announced to increase in its tiles production capacity by 15,000 square meters per day through a greenfield project.
Halim Talukder, however, could not specify when the implementation process of the project would start.
The company’s net cash flow per share (NOCFPS) stood at Tk 0.29 for July-December ‘22 against Tk 0.20 for the same period in 2021.
Its net asset value (NAV) per share dropped to Tk 12.35 at the end of December 2022 which was Tk 11.78 till June same year.
Fu-Wang Ceramic Industries owns and operates two industrial units for the manufacturing of various types and sizes of floor tiles and glazed wall tiles, and sales thereof.
Sponsors and directors jointly held a 30 per cent stake in the company, while institutions owned 6.28 per cent, foreign investors 0.40 per cent, and the general public 63.32 per cent as on January 2023. The company got listed on the stock exchanges in 2000.
