Earnings Report /
Bangladesh

Walton Hi-Tech Industries: Q1'23: 14% sales decline and foreign exchange loss made the company incur loss

  • EPS in Q1 FY23 stood at BDT -1.52 against BDT 9.28 EPS reported in Q1 FY22.

  • Net sales revenue declined by c14% YoY in Q1 FY23 driven by seasonality factor and shrinking consumer purchasing power.

  • The foreign exchange loss resulted from the re-pricing of the foreign currency denominated liabilities.

Shopnil Paul
Shopnil Paul

Research Associate

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IDLC Securities
10 November 2022
Published byIDLC Securities
  • WALTONHIL reported loss in Q1 FY23. EPS in Q1 FY23 stood at BDT -1.52 against BDT 9.28 EPS reported in Q1 FY22. The foreign exchange loss and c14% YoY dent in sales were the main reasons of the reported loss.

  • Net sales revenue declined by c14% YoY in Q1 FY23. Seasonality factor and shrinking purchasing power of the consumers are mainly attributable the decline in sales. The Q1 FY22 received almost the full impact of Eid-Ul-Adha festival sales. However, this year’s Eid-Ul-Adha sales was spilt between Q4 FY22 and Q1 FY23.

  • On top of that, the CPI inflation hit decade long high in Q1 FY23 in Bangladesh. As a result, the demand for consumer discretionary items got affected.

  • Gross margin improved by 96bps YoY. The average price of Iron Ore (cfr spot) – one of the key raw materials for the electronic equipment manufacturer dropped by 36.7% yoy. However, the currency depreciation partially offset a part of the impact.

  • BDT 3,224mn financial expense reported in Q1 FY23 led to the negative quarterly bottom-line. The foreign exchange loss resulted from the re-pricing of the foreign currency denominated liabilities.