In the fiscal year 2022-23, Walton Hi-tech Industries, a major player in the electronics industry, faced a significant decline in both sales and profits.
This downturn was primarily attributed to the unfavorable economic conditions arising from the ongoing conflict between Russia and Ukraine.
During the last fiscal year, Walton’s sales plummeted by Tk 15.31 billion, marking a 19% decrease, ultimately settling at Tk 66.37 billion. Profits also took a severe hit, declining by Tk 4.34 billion, which amounts to approximately 36%, reaching Tk 7.82 billion for the 12 months Consequently, the earnings per share saw a sharp decline from Tk 40.16 to Tk 25.84.
In its annual report, the company acknowledged that the fiscal year 2022-23 was challenging not just for Walton but for all business sectors.
The Russia-Ukraine war and the surge in the US dollar’s value, coupled with a severe dollar crisis in Bangladesh, had a detrimental impact.
This resulted in an abnormal increase in the cost of finance, leading to a significant reduction in net profits.
Walton’s outlook remains cautiously optimistic, as the issues stemming from the Russia-Ukraine war and the ongoing dollar crisis in Bangladesh are yet to be definitively resolved.
According to the company’s financial reports, the global economy faced immense pressure due to the European conflict, which emerged as the world was recovering from the impacts of the COVID-19 pandemic.
These financial reports revealed that Walton’s exports nearly halved, dwindling to Tk 1.29 billion.
The invasion of Ukraine significantly contributed to inflationary pressures and led to higher consumer prices.
The strength of the euro and the dollar against the local currency resulted in substantial foreign losses on suppliers’ repayments.
Walton saw a substantial 54% increase in foreign exchange losses, totalling Tk 4.69 billion in 2022-23, up from Tk 3.04 billion in the previous year.
The company’s sales of fridges, televisions, and home appliances decreased, while revenue from air conditioners and electrical appliances increased. Air conditioner sales saw a notable 39% rise to Tk 6.46 billion in the last fiscal year.
Conversely, fridge and refrigerator sales dropped by 27% to Tk 58.14 billion.
Television and home appliance sales also declined, with 34% to Tk 5.31 billion and 10% to Tk 394, respectively.
The consumer’s reduced purchasing power, driven by higher inflation rates, led to a decline in the purchase of luxury items.
Price adjustments were necessary to counteract the devaluation of the local currency, prompting consumers to retain their existing fridges and televisions for a longer period.
Severe heat waves experienced in the country in the preceding year contributed to increased sales of air conditioners.