Having posting an impressive annual profit growth in 2023, Singer Bangladesh suffered a loss of Tk 21 million in January-March this year, thanks to higher finance expenses amid the rising interest rate.
The electronic and home appliance manufacturer gained Tk 112 million in the same quarter a year before, according to a statement published on Wednesday.
The company's sales, however, increased 8.10 per cent year-on-year to Tk 4 billion in the January-March quarter due to selling price adjustment.
"Singer's strategy is to maintain competitiveness in the market. Therefore, increased costs have not been reflected in the prices," reads the statement.
Finance costs were up 44.7 per cent in the quarter due to higher borrowings at increased interest rates.
The average interest rate increased by more than 3.5 per cent during the quarter, compared to last year's same period.
Also, the company was required to keep a provision of Tk 24.1 million during the quarter as minimum tax impact, said the company.
However, the effective tax rate in the current quarter is expected to decrease considerably, bringing down tax burden in the coming quarters.
Gross profit margin for the first quarter was lower than last year by 1.4 per cent because of an increase in the sale of trade goods, forex devaluation, and higher discounts.
The cost of sales increased, owing to the devaluation of the taka against the US dollar and the increase in sales of trade goods.
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 in 2022.
Based on the profit growth, the board of directors declared a 35 per cent cash dividend for 2023, up from 10 per cent for 2022.
The stock price shed 1.21 per cent to Tk 138.4 per share on Wednesday.
New plant start production
Singer Bangladesh began manufacturing products at its new plant, at Bangladesh Special Economic Zone (BSEZ) in Narayanganj last month, aiming to reduce import dependence and locally manufacture over 90 per cent of components.
Established with an investment of $78 million, the new plant set up on 35 acres of land has world-class machinery to ensure products of a global standard. Turkish multinational Arcelik holds the controlling 57 per cent stake.
Singer will manufacture air conditioners, televisions, and other home appliances in phases by the third quarter of this year.
Singer is one of the largest retailers of consumer durables in Bangladesh offering Singer, Beko and other brands.
© 2024 - All Rights with The Financial Express
