A majority of the companies – listed under the textile sector – have released their respective financial reports for the first six months of FY24, and 28 among them have recorded profits.
Among these profitable companies, three had posted losses in the previous FY. Besides, of the 17 loss-making companies, 11 had made a profit in the previous financial year. The information came to light through an analysis of the published financial reports of those companies.
There are currently 58 companies listed on the stock market. Of these, 13 companies have yet to release their financial reports for the first six months of FY24.
Top profit makers
Malek Spinning Mills Ltd posted the highest profit in the first six months (H1) of FY24, recording earnings per share of Tk 4.06 and net profit after tax of Tk 78.60 crore during the period.
Cancelling the previously taken mega investment plan in favour of setting up a new production unit, Malek Spinning Mills has now decided to replace or upgrade some of its existing machinery to enhance production efficiency.
The fresh move is intended to replace its worn-out machines with modern ones in its Gazipur-based factory at a cost of Tk 106.64 crore, according to a Dhaka Stock Exchange (DSE) filing posted on April 20, 2023.
Malek Spinning Mills Company Secretary Syed Saiful Haque said, “The reporting period cost of goods sold (COGS) decreased significantly compared to the previous period due to a decrease in raw material prices, resulting in increased gross profit and net profit, as well as increased EPS.
“Besides, it has been possible to increase the production of last year's BMRE. Due to the increase in collection against turnover and receivables, consolidated NOCFPS has increased. Due to the increase in retained earnings, consolidated NAV has increased.”
The company produces export-oriented knit yarn, and its most recent share price on the Dhaka Stock Exchange (DSE) was Tk 36 on Wednesday.
Malek Spinning, a sister concern of New Asia Group, has three subsidiaries – Salek Textile Limited, JM Fabrics Ltd, and Newasia Synthetics Ltd.
But Newasia Synthetics Ltd, a project promoted for setting up a polyester staple fiber and chip plant, could not be implemented due to the non-availability of a gas connection from Titas Gas.
In the second quarter (Q2) of this fiscal year, the company reported a net profit of Tk 41.81 crore, up from a loss of Tk 10.54 crore in the same period last fiscal. The company had declared no dividend for FY23.
Square Textiles PLC is in the second position in terms of profit. The company posted earnings per share of Tk 3.05 and net profit after tax of Tk 60.16 crore in the first six months of FY24.
As the reason for profit, the company says, profit increased due to an increase in yarn production from the new project at Habiganj as well as BMRE activities at SQUARE Texcom Ltd.
Besides, Paramount Textile PLC posted earnings per share of Tk3.06 and a profit of Tk 49.82 crore in the first six months of FY24.
Envoy Textiles Ltd and Hwa Well Textiles (BD) PLC posted earnings per share of Tk 1.45 and Tk 2.34, respectively, during the period. Besides, profit after tax was Tk 24.32 and Tk 13.10, respectively.
Top loss sufferers
Maksons Spinning Mills Ltd posted the highest loss during the first six months (July–December) of FY24. The company made a net loss of Tk 45.74 during this period.
Maksons Spinning Mills Ltd Company Secretary Noor Mohammad said, “Our profits dropped due to a decline in the unit price of finished goods, and an increase in the cost of goods sold (COGS), triggered by an increase in utility costs, salaries, wages, and raw material prices.
“An increase in financial charges also caused a fall in the EPS. NOCFPS has decreased due to an increase in payment for costs and other expenses in comparison to the previous period of the previous year.”
Safko Spinnings Mills Ltd incurred the second highest loss, posting a net loss of Tk 22.36 crore in the first six months of FY24.
Besides, Zahintex Industries Limited made a loss of Tk 21.35 crore, Esquire Knit Composite PLC made a loss of Tk 14.83 crore, and Shepherd Industries PLC made a loss of Tk 12.32 crore.
Saiham Textile Mills Ltd, Queen South Textile Mills Ltd, and Rahim Textile Mills Ltd posted a profit of Tk 2.19 crore, TK 1.99 crore, and Tk 23 lakh, respectively in FY24, despite losses in FY23.