Earnings of three-fourths of listed textile cos slump

Earnings of three-fourth listed textile sector companies fell in the first half (H1) of the current fiscal year as exports endured declining trend while the financial expenses increased.

There are 56 textile and garment companies listed on the Dhaka Stock Exchange, of them 50 declared their earnings for July-December, 2019 period so far as of Monday.

Of them, 38 manufacturers witnessed a sharp fall of earnings per share in July-December, 2019 compared to the same period of the previous year, according to available data with the DSE.

Industry insiders said sluggish exports earnings coupled with higher financial expenses as well as overvalued local currency and rise in production cost affected the earnings during the period under review.

Alltex Industries, Dulamia Cotton, Mozaffar Hossain Spinning Mills and Zahintex Industries continued to incur loss while Safko Spinning, RN Spinning Mills, Zaheen Spinning and Tosrifa Industries counted loss during the period with that of profits in the same period in the previous year.

Sector people fear further deterioration in the apparel sector due to global Covid-19 pandemic which is adversely impacting the earnings of the listed companies.

Garment factories faced shutdown until April 25 and many of them remained closed due to deadly Covid-19 onslaught till last week which will impact their earnings in coming quarters, they feared.

The pandemic has started to hit the sector as ready-made garment export plunged nearly 85 per cent year-on-year to Tk $366.58 million in April this year, according to Bangladesh Garment Manufacturers and Exporters Association compiling statistics from the National Board of Revenue.

The export earnings from garment shipment, which accounts for more than 80 per cent of country's total export, also fell by 7.12 per cent year-on-year to $24.10 billion in the first nine months of the current fiscal year until March, the Export Promotion Bureau (EPB) data showed.

Majority of western retailers and brands shut down their stores in the Europe and the US due to Covid-19 pandemic.

Many international retailers and brands have already cancelled work orders from different local factories, worth more than $3.11 billion as of this week, the BGMEA claimed.

The worst-affected countries from Covid-19, such as Italy, the UK, the US, France, Spain and Germany are the prime destinations of Bangladesh's export of garment items.

Meanwhile, the EPS of 12 textile and garment companies rose during the period under review.

Paramount Textile's EPS jumped 137 per cent year-on-year to Tk 2.61 for July-December, 2019.

The EPS of ML Dyeing rose 34 per cent to Tk 0.94 for July-December, 2019.

The EPS of Anlimayarn Dyeing rose 33 per cent to Tk 0.24 for July-December, 2019, followed by Ring Shine Textile with 32 per cent to Tk 0.96, Kattali Textile 21 per cent to Tk 1.05, Sonagoan Textile 14 per cent to Tk 0.33.

The EPS of HR Textile, Rahim Textile, Hwa Well Textile, VFS Thread Dyeing, Makson Spinning and Metro Spinning also rose during the period under review.

Fifteen of the listed textile companies were trading under the 'Z' category, a low-profile and junk shares group, on the stock exchange due to their poor business performance.

Out of 56 listed textile companies, 23 were trading below the face value of Tk 10 each. Currently, the textile sector accounts for 3.70 per cent of the DSE's total market capitalisation.

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