Shares of Walton Hi-Tech Industries took a considerable hit despite the company’s substantial profit surge in the first half of fiscal 2023-24.
The profit soared to Tk 34 billion from Tk 140 million in the same period the previous year, mainly due to reduced finance costs attributed to stable foreign exchange rates.
However, Walton experienced a setback as its share value plummeted by 7.49%, reaching a nearly three-year low of Tk 840 per unit, according to data from the Dhaka Stock Exchange (DSE).
The financial statements revealed an 8.4% year-on-year sales decline, amounting to Tk 23.68 billion during the first six months of fiscal 2023-24.
Despite higher profits, the company’s net operating cash flow per share saw a significant drop from Tk 61 to Tk 27 compared to the corresponding period of fiscal 2022-23.
This decline was attributed to a 20.8% year-on-year reduction in sales proceeds, which amounted to Tk 28.92 billion.
In a disclosure to the DSE, Walton explained that the increase in profits was a result of lower finance costs during the July-December period, which saw fewer fluctuations in the local currency against foreign currencies compared to the previous fiscal year.
The company faced challenges in fiscal 2022-23 due to frequent devaluation of the local currency, leading to increased finance costs for importing raw materials.
As these fluctuations decreased in recent quarters, Walton experienced a reduction in foreign exchange losses.
Addressing the decline in sales, a company official mentioned that the demand for home appliances and electronics dwindled due to ongoing inflationary pressure.
Despite raising prices, Walton witnessed lower sales proceeds amid a significant drop in overall sales. The official expressed optimism, stating that if inflationary pressure eases, sales are likely to rise.
Walton’s earnings per share (EPS) reached Tk 11.24, a significant increase from Tk 0.47 previously.
The company provided a 300% dividend to its shareholders for fiscal 2022-23 after offloading 1% of its shares in 2020.
Although overall sales dropped, Walton reported a 5% year-on-year sales increase to Tk 11.65 billion in the October-December period of fiscal 2023-24, with profits more than doubling to Tk 1.4 billion.
Finance costs also decreased by 22% year-on-year to Tk 1.15 billion during this period, as per the company’s financial reports.
Walton’s financial data revealed a paid-up capital of Tk 3.02 billion and reserves of Tk 100.16 billion, according to DSE data.
