Paramount Textile's profits fell as export targets were not met due to the global recession

Paramount Textile Limited is a textile maker fall a 14 per cent year-on-year jump in net profit in the first quarter (July-September) of the fiscal year 2024 due to export target did not reach the expected level.

The publicly traded firm posted Tk 23.58 crore in net profit in the July-September period of the fiscal year 2023-24 against Tk 27.47 crore in the same period last fiscal.

The company this year also registered the second highest first quarterly profit in the last five years; the highest profit was recorded in the first quarter of the previous financial year FY23.

Last year, the company 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.

Paramount Textile's Company Secretary Robiul Islam said last year several new investments have been made by the company. From which the income is also coming. It is difficult to calculate the full year with the income from the first quarter of the year. Earnings fell in the quarter as exports fell as expected due to global recession. It is expected that it will be possible to increase exports during the rest of the year.

The listed company already started reaping benefits from the new production line as its revenue jumped dramatically by 9.47 per cent in the first quarter of FY24 compared to that in the same period of the last fiscal. 

The textile maker logged revenue of Tk 226.60 crore in the July-September period of FY24 against the figure of Tk 206.9 crore in the same period last year.

In this quarter, despite the increase in revenue, the cost of production of goods increased by about 7 percent, as a result, despite the increase in income, the profit did not increase in proportion, Said Robiul Islam.

The revenue earned from the yarn and solid dyed fabric segment stood at Tk 191.33 crore in Q1 this fiscal which was Tk 175.1 crore in the same period of the last fiscal.

On the other hand, the knit yarn dyeing unit generated Tk 5.51 crore as revenue in the latest quarter against Tk 10.38 crore in the corresponding period last fiscal year.

Paramount Textile in November, 2020 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, the year 2022, the company invested in a 200MW heavy-speed diesel-based power plant at Baghabari in Sirajganj district.

The company’s earnings per share (EPS) stood at Tk 1.34 for the July-September period of FY24 against Tk 1.62 for the same period last year.

The EPS for the first quarter in FY22 was Tk 1.51 which was Tk 1.34 and Tk 0.62 for the same period of FY21 and FY20 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.