Walton Hi-Tech Industries Limited, the leading electrical and electronics manufacturer of Bangladesh has recently published its Q1 financial report of FY 2021-22. Revenue of the company increased by 9.4% YoY from Tk 15,724.0 Mn in Q1’20-21 to Tk 17,209.2 Mn in Q1’21-22. However, profit after tax decreased by 30.1% YoY from Tk 4,017.2 Mn in Q1’20-21 to Tk 2,809.9 Mn in Q1’21-22.
Revenue
The revenue of Walton increased by 9.4% YoY in Q1’21-22 even though July and the first week of August were in strict lockdown due to Covid-19. This is mainly due to the rise of consumer spending in 2021 as the mass vaccination program has allowed normalcy of business activities. Domestic sales increased by 6.2% YoY from Tk 15,624.2 Mn in Q1’20-21 to Tk 16.585.2 Mn in Q1’21-22. Export which is now the focus of the company increased by a staggering 525.1% YoY from Tk 99.8 Mn in Q1’20-21 to Tk 624.0 Mn in Q1’21-22. However, the company could not avail the desired level of sales from Eid ul Adha due to lockdown during that period.
However, gross profit decreased by 18.5% YoY mainly due to a decline in gross profit margin. The gross profit margin was 30.8% in Q1’21-22 which was 41.4% in Q1’20-21. The decrease of gross profit margin is mainly due to the price hike of inventories in the international market compared to the same period last year.
Profit
Profit after tax decreased by 30.1% mainly due to lower gross profit margin and higher operating expenses. Selling & Distribution expenses increased by 37.8% YoY from Tk 1,299.0 Mn in Q1’20-21 to Tk 1,790.6 Mn in Q1’21-22.
Conclusion
In terms of revenue continues to grow despite facing two phases of lockdown in 2021. However, gross margin is decreasing due to the global price hike of raw materials. If the global supply chain shortage continues then Walton’s gross profit and net profit margin may not recover in the coming quarters.
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