Profit nosedives 76.8% between Jul-Sep
Envoy Textiles, a leading textile exporter, saw its profit crash 76.8 per cent year-on-year to Tk 2.2 crore between July and September as the global coronavirus pandemic caused a whiplash to its business.
During the quarter, sales of the LEED-certified green factory set up 2008 plunged 10.6 per cent to Tk 195.7 crore.
Envoy Textiles placed the blame squarely on the ongoing pandemic for the downturn in its fortunes during the first quarter of its 2020-21 financial year. The company’s financial year runs from July to June.
“Not only Bangladesh, but the global economy suffered severely for the pandemic,” said Abdus Salam Murshedy, managing director of Envoy Textiles.
The impact of the supply chain disruption was very acute, while the demand side was also vulnerable as people's income shrank across the globe, he said.
Bangladesh’s apparel export between July and September stood at $8.1 billion, up 1.3 per cent from a year earlier, according to data from the Export Promotion Bureau. But in October, garment exports were down 8 per cent year-on-year at $2.3 billion.
“Work orders by the global retailers are going through a sluggish trend,” said M Saiful Chowdhury, company secretary of Envoy Textiles, adding that the brands are lowering the prices of goods.
The other reasons for the lower sales during the quarter include a lesser number of working days for Eid holidays and cancellation of deferral of work orders.
“Though there are worker orders from global buyers, it is not enough to run the factory. We have to bear the overhead costs and other expenses. As a result, profits came down sharply,” he added.
Murshedy though remains upbeat.
“Now, we have enough work orders for the current quarter and are hoping for better earnings. From November onwards, there is a possibility of returning to better production.”
However, amid the hope there is also the apprehension of a second wave, which could further disrupt the supply and demand sides, he added.
Shares of Envoy Textiles, which was listed in 2012, closed at Tk 24.6 yesterday, which is more or less the same as it started 2020.
The company announced a 5 per cent cash dividend for the 2019-20 financial year, down from the 15 per cent offered in the previous year.