Singer sustains losses in Q3 as political crisis, floods weigh

Singer Bangladesh suffered a net loss of Tk 185 million in the third quarter (July-September) of this year, due mainly to lower than expected sales amid recent political crisis and devastating floods.
However, the multinational electronic and home appliance manufacturer made a profit of Tk 87.7 million in the same quarter a year before, according to its un-audited financial statements published on Tuesday.
Subsequently, the earnings per share (EPS) stood at negative Tk 1.86 for July-September quarter, as against Tk 0.88 per share in the same quarter of the previous year.
The company's sales grew marginally by 7.0 per cent year-on-year to Tk 3.6 billion in the September quarter, still lower than expected.
"The political crisis, which persisted until mid-August, combined with the devastating floods that struck the eastern part in late August and the western part in September, led to sales falling below expectations," said the company in a statement.
The company's finance costs more than doubled to Tk 364 million in July-September this year from Tk 153 million in the same quarter last year due to the higher level of borrowing amid higher interest rates.
Moreover, foreign exchange loss was incurred due to the significant currency depreciation (approximately 7.0 per cent) in May 2024, according to the company.
Besides, the effective tax rate for Q3 this year stood at 59.3 per cent, compared to 31.5 per cent in Q3 last year.
The gross profit margin decreased to 27.6 per cent compared to the previous year's 29.5 per cent because of an increase in sales of trade goods, including locally sourced products, due to forex crisis, higher discounts, and promotional activities to materialise the sales, said the company in its earnings notes.
The cost of sales, which includes all associated costs to manufacture products, stood at Tk 2.61 billion in July-September this year, which was 72.52 per cent of total sales in Q3 of this year, up from 70.62 per cent of total sales in the same quarter last year, driven by the devaluation of taka against the US dollar and the increase in sales of goods.
Net operating cash flow per share (NOCFPS) turned negative Tk 7.36 per share in July-September this year, as against positive Tk 8.17 in the same quarter last year due mainly to lower than expected sales and collection amid the political crisis and floods.
"The company faced various obstacles during the period under review, including the devaluation of local currency against dollar, opening LCs, and rising finance costs amid ongoing economic challenges," reads the earnings notes.
"However, Singer is strongly present in the appliances market and will further accelerate its operation. The company has already taken many initiatives to enhance its current business operation," it added.
Its nine months' profit also fell sharply by more than 92 per cent year-on-year to Tk 50 million in January-September this year although sales grew 8.4 per cent to Tk 15.46 billion during the period.
Following the earnings news, its stock price dropped 0.60 per cent to Tk 134.6 on Tuesday on Dhaka Stock Exchange.
Annual Performance
Singer posted an impressive 615 per cent growth in profit to Tk 522 million in December 2023, as the company managed to offset some of the costs by increasing product prices.
Singer achieved a turnover of Tk 17 billion in 2023, almost the same as Tk 17.10 billion in 2022.
Based on the profit growth, the board of directors of the company declared a 35 per cent cash dividend in 2023, compared to 10 per cent in 2022.
Listed in 1983, Singer is one of the largest retailers of consumer durables in Bangladesh offering Singer, Beko and other brands.

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