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Singer Bangladesh's loss escalated 160 per cent year-on-year to Tk 480 million in the third quarter through September this year despite higher sales, due to a significant increase in finance costs.
The multinational electronics and home appliance manufacturer has reported negative earnings of Tk 4.81 per share in the July-September quarter, up from Tk 1.85 per share in the same quarter a year ago, according to price-sensitive information published on Thursday.
Singer, however, said the loans it had taken funded the construction of its new manufacturing plant at the Bangladesh Special Economic Zone (BSEZ), a strategic move expected to triple production capacity to achieve cost advantage.
The boost in production will improve profitability, which is anticipated to become visible in the coming years, said the company in its earnings note.
Sales rose more than 15 per cent year-on-year to Tk 4.13 billion in the quarter through September, while operating expenses jumped 14 per cent year-on-year in the quarter.
The gross profit margin slid 1.8 per cent year-on-year during the period.
On the other hand, Singer's net finance costs soared more than 119 per cent year-on-year to Tk 1.92 billion in July-September this year. That is mainly due to interest payments on long-term loans (foreign loans and syndicated loans) and overall higher borrowing costs, the company explained.
Singer obtained a loan of EUR 27.50 million from its parent company in March last year, with a term of seven years - a two-year grace period plus a five-year repayment period. Apart from that, it took out syndicated loans worth Tk 2 billion from local banks last year.
As a result, its short-term borrowings shot up by 18 per cent to Tk 14.09 billion between December last year and September this year. Its long-term debts, however, were reduced to Tk 4.90 billion from Tk 5.94 billion in the nine months through September this year.
The Taka has been devalued against the Euro by 4.2 per cent since May this year. "This has significantly impacted unrealised exchange losses."
Selling prices could not be increased to remain competitive, which caused losses, the company said. "Average cost of products went up for discounts or promotional offers given to customers."
Singer endured a loss of Tk 1.14 billion in the nine months through September this year although sales grew 15 per cent year-on-year during the period.
Income tax expenses have also increased by 75.8 per cent year-on-year in the nine months due to some statutory disallowances despite the new factory being under a multi-year tax incentive scheme.
Meanwhile, the stock of Singer dropped 0.29 per cent to Tk 102.2 per share on Thursday on the Dhaka Stock Exchange.
Production rollout at new plant
Singer started commercial operation of the new manufacturing plant in January this year.
The plant is the flagship project within the Bangladesh Special Economic Zone at Araihazar in Narayanganj.
Spanning 135,000 square meters, the new plant is designed to manufacture 90 per cent of Singer products, including refrigerators, televisions, washing machines, and air conditioners, for the local market.
Annual Performance
Singer suffered a loss of Tk 490 million in 2024, for the first time in six years, due to a substantial increase in finance costs.
Despite losses, the company paid a 10 per cent cash dividend for 2024, although reduced from 35 per cent cash dividends paid for 2023.
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