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Listed textile and garment makers are suffering from the hike in fuel oil and electricity prices, while the increased raw materials prices in the global market also hampered their profitability to a great extent.
Meanwhile, a decline in buying orders from the US and the European countries, has added extra fuel to the woes of the sector, industry insiders say.
A total 58 listed companies belong to the textile sector of the prime bourse Dhaka Stock Exchange (DSE).
Of them, 48 firms so far published their third quarterly financial reports in the fiscal year 2022-23, with 30 companies displaying negative financial performance at the end of the first nine months of the fiscal.
Among the 30 negative performers, at least 15 companies incurred a net loss, while the remaining 15 firms registered a profit fall, as per their unaudited financial reports.
With this count, more than 62 per cent of the textile-sector companies registered a negative performance in the July-March period of FY23.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan told The Business Post the apparel sector is passing a difficult time and more challenges are coming.
He said the sector is likely to see negative growth in the next two months and he does not know what will happen thereafter.
“The whole world is facing an economic crisis, which has cut apparel sales. That is why brands have huge unsold stocks in their warehouses.”
“Amid this, the recent gas and fuel price hikes in Bangladesh increased our production costs, which also impacted the flow of orders,” explained the apparel leader.
Safko Spinning Mills Ltd suffered the most, with incurring a net loss of Tk 7.65 crore in the July-March period of the fiscal 2022-23, against a net profit of Tk 0.38 crore.
The company’s earnings per share (EPS) dropped to Tk 2.55 negative in the July-March period of the current fiscal from Tk 0.15 in the same period last fiscal.
Thus, the company’s earnings sank around 19 times in the first nine months of the ongoing fiscal year on a year-on-year basis. Iftekhar Ahmed, company secretary of Safko Spinning Mills, told The Business Post that the local yarn manufacturers were now passing a very tough time because of the declining yarn prices in the local market impacted by the growing yarn imports.
“The yarn price fall coupled with the price hikes in gas and electricity prices, pushed local textile manufacturers on the verge of ruin,” he added.
Alltex Industries Ltd, another listed textile firm, registered a net loss of Tk 10.69 crore in the July-March period of the fiscal 2022-23, against a profit of Tk 0.82 crore in the same period last fiscal year.
Prime Textile Spinning Mills Limited logged Tk 22.19 crore in net loss in the first nine months of FY23, compared to a profit of Tk 1.83 crore in the same period of FY22.
The listed firm’s earnings per share (EPS) plunged to Tk 5.81 negative in the July-March of FY23 from Tk 0.48 in the corresponding period last fiscal.
Matin Spinning Limited posted a net profit of Tk 38.89 crore in the first three quarters of the fiscal year 2022-23, much lower than the profit of Tk 77.79 crore in the first three quarters of the fiscal year 2021-22.
Malek Spinning Limited, another pioneer company, fetched a net loss of Tk 21.87 in the July-March period of FY23, whereas the listed firm had made a net profit of Tk 56.33 crore in the same period of FY22.
Square Textile Ltd, a sister concern of Square Group, reported a net profit of Tk 81.46 crore in the first three quarters of FY23, against the profit of Tk 141 crore. Maksons Spinning Limited, another leading textile-sector company, reported a net loss of Tk 23.33 crore in the first nine months of FY23, against a profit of Tk 61 crore in the same period of the last fiscal year.
Dacca Dyeing, Desh Garmens, Dragon Sweater, Envoy Textile, Hamid Fabrics, Monno Fabrics, Pacific Denims, Rahim Textile, Saiham Cotton, Saiham Textile, Shasha Denims, Shepherd Industries, Simtex Industries, Sonargaon Textile, Zahintex Industries, Queen South textile, Al-Haj Textile, Aman Cotton, Alif Manufacturing, and VFS Thread Dyeing were the other textile-sector companies of which profitability got severely hampered in the first nine months of the current fiscal year.
