Singer Bangladesh stocks fell as profit declines by 92% in 9-month

Despite an 8% growth in turnover, Singer Bangladesh reported a 92.47% decline in profit for the first nine months of 2024, as the multinational home appliances manufacturer incurred substantial losses in the third quarter.

Following the significant fall in its net profit, Singer Bangladesh's stock price declined 8.84% or Tk11.9 each to Tk122.70 each, according to the Dhaka Stock Exchange (DSE).

According to its un-audited financials for the January to September of 2024, its turnover increased to Tk1,545.90 crore and profit declined to Tk5.05 crore over the same period of the previous year.

In the third quarter during July to September of 2024, it incurred a loss of Tk18.55 crore although its turnover increased by 7% over the same period of the previous year.

According to its financials, among the first three quarters of 2024, it incurred a loss in the first and third quarter, and only in the second quarter (April-June) before Eid-Ul Adha, it made a profit over Tk25 crore.

Singer Bangladesh said the turnover has increased by 8.4% in 2024; however, the gross profit (GP) margin declined by 2.2% compared to Q3 of 2023, indicating a significant deviation in the financials

"The decline in the gross profit margin is primarily due to an increase in the sales of trade goods, including locally sourced products, driven by the forex crisis. Additionally, higher discounts and promotional efforts aimed at boosting sales have further reduced margins. Besides, the product SKU and sales channel mix have also contributed to a negative impact on margins," read in the explanatory note.

Also, it said, the operating profit of the company has declined by 31.4% compared to Q3 2023, primarily due to increased spending on advertising and sales promotions (some initiatives will result in Q4 and onward). Additional contributing factors include higher shop operating costs from new store openings, increased rent, bad debt provisions, office administrative expenses, and repair and maintenance costs for the new factory. The overall operating expenses have increased by 20.0% compared to Q3 2023.

Finance costs also have increased by 103.0% due to an increase in utilisation of short-term borrowing by 55.3% in Q3 2024 coupled with the increased interest rates by more than 47.0% compared to last year.

In the first nine months, its finance costs increased to Tk88.91 crore, which was Tk43.80 crore in the same period of the previous year, according to its financial statement.

In 2023, Singer Bangladesh made a profit of Tk52.20 crore, and paid a 35% cash dividend to its shareholders.