Ifad Autos’ Profit Declined By 39.4% In Q1’21-222 min read
IFAD Autos Limited, one of the leading automobiles companies in Bangladesh has posted its financial report for the period of Jul’21-Sep’21. Revenue of the company declined by 7.7% YoY from Tk 1,877.9 Mn in Q1’20-21 to Tk 1,733.3 Mn in Q1’21-22. Profit after tax declined by 39.4% YoY from Tk 172.4 Mn in Q1’20-21 to Tk 104.4 Mn in Q1’21-22.
Revenue decreased by Tk 144.7 Mn as the company witnessed another tough quarter due to Covid-19 lockdown. The government imposed over a month-long lockdown from July to the first week of August to reduce the infection rate of Covid-19. Hence the demand for commercial vehicles was lower compared to the same period last year. Imported vehicles sales which is the main source of Ifad Autos declined by 43.1% YoY from Tk 1,312.0 in Q1’20-21 to Tk 746.0 Mn in Q1’21-22. Sales from Assembling units increased by 64.6% YoY from Tk 562.2 Mn in Q1’20-21 to Tk 925.6 Mn in Q1’21-22.
Gross profit declined by 17.7% YoY mainly due to a decrease in Gross profit margin. Gross profit was 18.4% in Q1’21-22 which was 20.6% in the same period last year.
Profit Declined by 39.4% YoY from Tk 172.4 Mn in Q1’20-21 to Tk 104.4 Mn in Q1’21-22. Profit declined mainly due to de-growth in gross profit and higher operating expenses. Administrative expense and Selling expense increased by 9.3% and 2.2% YoY. As a result, operating profit declined by 29.2% YoY from Tk 260.9 Mn in Q1’20-21 to Tk 184.5 Mn in Q1’21-22.
Ifad’s recovery of revenue fully depends on the rise of business activities. Due to the mass vaccination program of the government Covid-19 infection rate has reduced significantly. However, businesses are now facing inflationary pressures as the cost of raw materials and freight costs have risen significantly. Hence the company might face another tough quarter in Q2’21-22.