Textiles weaving vaccine hopes into recovery
DSE data show 56 textile companies are listed on the stock market. At the end of FY20, 19 companies incurred losses and 28 made profits as their sales revenue of the first nine months was good
Listed textile companies in the country failed to do good business in the last fiscal year as apparel exports dropped because of the Covid-19 pandemic, but vaccine hopes have now made them optimistic that they will recover from losses.
The second wave of Covid-19 is going on in different countries of the world. Despite the decline in sales and revenues caused by the second wave, textile companies are hopeful that they will recover.
As per Dhaka Stock Exchange (DSE) data and disclosures of the listed firms, they have seen a slight recovery while many of them hope to earn profits.
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DSE data show 56 textile companies are listed on the stock market. At the end of FY20, 19 companies incurred losses and 28 made profits as their sales revenue of the first nine months was good.
Though FY20 ended more than six months ago, nine listed companies have not yet published their annual data.
Usually, the listed firms get 120 days to publish their audited financial statements after the end of the fiscal year. If they fail to do so, they need to pay a penalty of Tk5,000 per day.
In the first quarter of FY21, the number of loss-making companies decreased compared to the whole FY20. At the end of the quarter, the number of loss-making companies stood at 16 while 26 companies earned profits and 14 failed to disclose their financial statements, causing their shareholders to remain in the dark.
Data from the first quarter of FY20 showed that 14 listed companies incurred losses while 40 earned profits.
In FY20, Saiham Textile Mills Ltd incurred losses but in the first quarter of FY21, it made good profits as turnover and product sales increased.
Saiham Textile's Company Secretary Md Neyamat Ullah told The Business Standard, "As our revenue and profit decreased in FY20 but fixed costs continued, this led to losses. But in the first quarter of FY21, our profits increased, and we earned good revenues."
Hopefully, the textile sector will do good in the coming days, he said.
New Line Clothings Limited posted an upward growth in FY20 despite the pandemic. It also reported consistent growth in profits in the first and second quarters of the current financial year.
In the first half of FY21, it made a profit of Tk7.22 crore and its earnings per share (EPS) stood at Tk0.92. In the same period of the previous fiscal year, its profit was Tk6.98 crore and EPS was Tk0.89.
The company was listed on the stock market in 2019. It exports products to Germany, the UK, and Australia.
Argon Denims Limited made good profits in the last fiscal year and also in the first quarter of FY21.
Md Moniruzzaman Bhuiyan, company secretary of Argon Denims, said, "Although the situation in our country is not so bad, the second wave is going on in many European countries."
"However, vaccine hopes have made textile entrepreneurs optimistic. Once everyone gets vaccinated, the panic over coronavirus will go away. Then everyone will go shopping."
