Walton Hi-Tech Industries posted a sharp 28 per cent year-on-year decline in profit to Tk 2.80 billion in the January–March quarter of FY26, as higher value-added tax (VAT) on key products squeezed sales and margins.
Earnings per share (EPS) fell to Tk 8.39 in the third quarter from Tk 11.76 in the same period a year earlier, according to the company’s unaudited financial statements published on Wednesday.
The country’s leading electronics and home appliance maker attributed the downturn primarily to a contraction in sales following a steep hike in output VAT on refrigerators and air conditioners—two of its core products.
The VAT rate doubled from 7.5 per cent to 15 per cent.
Facing intense market competition, Walton said it could not pass on the additional tax burden to consumers. Instead, the company increased rebate offerings to remain competitive, further eroding profitability.
As a result, quarterly revenue dropped 13 per cent year-on-year to Tk 17.86 billion, while elevated VAT costs weighed heavily on the bottom line.
For the first nine months through March this year, Walton’s profit also declined 7.6 per cent to Tk 6.43 billion, while revenue slipped 1.1 per cent to Tk 45.48 billion.
However, the company reported a significant turnaround in cash flow. Net operating cash flow per share rose to Tk 22.32 during the nine-month period, compared to negative Tk 1.67 a year earlier. Walton attributed this improvement to an 8.18 per cent increase in customer collections and a 19.28 per cent reduction in supplier payments.
Despite current challenges, Walton continues to expand its global footprint. The company, which set up its first compressor manufacturing plant in 2017, now exports refrigerators and other products to more than 50 countries.
Annual performance under pressure
For FY25, Walton’s profit fell 23 per cent year-on-year to Tk 10.37 billion, reflecting subdued consumer demand amid inflationary pressures and political unrest during mid-2024.
Annual revenue declined 5.72 per cent year-on-year to Tk 70.82 billion.
The weaker earnings prompted a reduction in shareholder returns, with the company declaring 175 per cent cash and 10 per cent stock dividends for FY25, down from 350 per cent cash dividends in the previous year.
Merger move in final stage
Meanwhile, Walton’s planned merger with Walton Digi-Tech Industries is nearing completion. The High Court has recently issued procedural directives, and an extraordinary general meeting has been scheduled for May 21 to secure approvals from shareholders and creditors.
Initially approved in September last year, the merger aims to diversify Walton’s product portfolio and enhance operational efficiency. The integration will bring in high-tech products such as laptops, mobile phones, printed circuit boards (PCB), and electric bikes.
The company expects the consolidation to strengthen its competitive position, expand market reach, and improve long-term profitability.
Walton Hi-Tech currently ranks as the fifth-largest listed company by market capitalisation, which stood at Tk 123 billion as of Wednesday. Its shares closed at Tk 364.3, down 1.19 per cent from the previous day.
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