Shares in Singer Bangladesh tumbled as profits plunged 92% in 9 months

Despite an 8% growth in turnover, Singer Bangladesh reported a 92.47% drop in profits in the first nine months of 2024 as the multinational home appliance maker suffered substantial losses in the third quarter.

Following the significant drop in its net profit, Singer Bangladesh’s share price fell 8.84% or Tk 11.9 apiece to Tk 122.70 apiece, according to the Dhaka Stock Exchange (DSE).

According to its unaudited financials for January-September 2024, its turnover rose to Tk 1,545.90 crore and profit declined to Tk 5.05 crore during the same period a year earlier.

In the third quarter from July to September 2024, it incurred a loss of Tk 18.55 crore, even as its turnover rose 7% over the same period a year earlier.

According to its financial data, among the first three quarters of 2024, it incurred losses in the first and third quarters, and only in the second quarter (April-June) before Eid-Ul Adha, it made a higher profit to Tk 25 million.

Singer Bangladesh said turnover has increased by 8.4% in 2024; however, the gross profit margin (GP) decreased by 2.2% compared to 3Q 2023, indicating a significant deviation in the finances.

“The decline in gross profit margin is primarily due to increased sales of commercial goods, including locally sourced products, driven by the currency crisis. In addition, higher discounts and promotional efforts aimed at increasing sales have further reduced margins. In addition, product SKU and sales channel mix have also contributed to a negative impact on margins,” read the explanatory note.

In addition, he said, the company’s operating profit has decreased by 31.4% compared to the third quarter of 2023, mainly due to increased spending on advertising and sales promotions (some initiatives will result in the fourth quarter and later). Other contributing factors include increased store operating costs due to new store openings, increased rent, bad debt provisions, office administrative expenses and repair and maintenance costs new factory General operating expenses have increased by 20.0% compared to the third quarter of 2023.

Finance costs have also increased by 103.0% due to a 55.3% increase in short-term loan utilization in 3Q 2024, along with the increase in interest rates by more than 47 .0% compared to last year.

In the first nine months, its finance costs rose to Tk 88.91 crore from Tk 43.80 crore in the same period a year earlier, according to its financial statement.

In 2023, Singer Bangladesh made a profit of Tk 52.20 crore and paid a cash dividend of 35% to its shareholders.