Business Report :
Singer Bangladesh Limited reported a 60 per cent decline in net profit for the first half of 2024, attributing the drop to rising business costs due to the forex crisis and increased interest rates.
The multinational electronics giant, listed on the country’s capital market, released its half-yearly financial report on its website yesterday. The report reveals that Singer recorded a net profit of Tk23.59 crore for January to June 2024, down from Tk58.31 crore during the same period last year.
Its earnings per share for this period stood at Tk2.37.
Besides, its sales revenue increased by 9 per cent to Tk1,185 crore in the first half compared to the same period the previous year.
Meanwhile, in the April-June quarter of 2024, its revenue rose by around 10 per cent to Tk785 crore, but the net profit dropped by 47 per cent to Tk25 crore compared to the previous year at the same time.
The company said in its financial statement that the reasons for the decreased profit margin are the increase in sales of trade goods, including locally sourced products due to the forex crisis, and higher discounts and promotional activities to materialise the sales.
It further stated that operating profit has decreased by 26 per cent compared to the previous year, mainly due to an increase in advertisement and sales promotion, shop operating expenses including new shops, rent, bad debts, and repair and maintenance expenses of the new factory.
The overall operating expenses have increased by 16 per cent from the previous year at the same time. Finance costs have also increased by 84 per cent due to an increase in interest rates by more than 4 per cent, it said.
To cope with the forex crisis, the company obtained an inter-company long-term loan of €27.50 million from its ultimate parent company, Arcelik AS, Turkey, in March 2024. The loan has a term of seven years, including a two-year grace period and a five-year repayment period.
On Thursday, Singer shares closed at Tk127.30 each – 4.26 per cent higher compared to the previous session – at the Dhaka Stock Exchange.
Its market capitalisation stood at Tk1,269 crore at the end of the Thursday session.
According to a UCB Asset Management report, Singer is competing with Walton as the second largest brand, with a 12 per cent market share in refrigerators and 11 per cent in television sets, against Walton’s gigantic 72 and 27 per cent market shares in the two categories, respectively.
With a 13 per cent market share in air conditioners, Singer is lagging only behind General and Gree and with an 18 per cent market share in washing machines, it is trying to catch up with Samsung.