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Far East Knitting posts steady growth in turnover

| Updated: January 29, 2019 12:07:13


Far East Knitting posts steady growth in turnover

Far East Knitting & Dyeing Industries (FEKDI) has posted a steady growth in turnover values in last five fiscal years (FYs) following the company's increased production capacity.

But a mixed trend was observed in net profit during the period due to various reasons including the hikes in gas and electricity bill and wages of employees.

The officials said the decline in export prices is the major reason behind the mixed trend in net profit amid increased turnover values.

For the FY 2017-18, the FEKDI has reported its turnover of above Tk 3.59 billion, which was 10 per cent higher than the turnover of the previous FY.

But the company's net profit declined 25 per cent to close at above Tk 261.90 million in the FY 2017-18 compared to same period of the previous year.

The company's directors' report said there has been a significant downward pressure on the export prices of the final garment while the cost of production continued to rise.

The company's turnover was above Tk 3.27 billion in the FY 2016-17, above Tk 3.13 billion in the FY 2015-16, above Tk 2.76 billion in the FY 2014-15 and above Tk 2.67 billion in the FY 2013-14, according to annual report.

On the other hand, the net profit fluctuated during 2013-14 to 2016-17 amid upward trend observed in turnover values.

The net profit was above Tk 349.48 million in the FY 2016-17, above Tk 294.01 million in the FY 2015-16, above Tk 314.66 million in the FY 2014-15 and above Tk 241.87 million in the FY 2013-14.

The company's directors' report said the production and export, in terms of units, have a growth of 4.35 per cent, whereas the sales turnover grew by only 9.79 per cent.

"The management feels that these are quite an achievement given the business environment and challenges that had to be faced in the past year," the company said.

It also said they are confident about the continuation of solid results to their shareholders for the long run.

The company's reported its EPS (earnings per share) of Tk 1.41 for 2017-18, Tk 1.88 for 2016-17, above Tk 1.82 for 2015-16, Tk 2.38 for 2014-15 and Tk 2.23 for 2013-14.

Asif Moyeen, the managing director of the FEKDI, said the export price has declined around 15 per cent whereas the cost of production increased above 15 per cent.

"That's why, the company's net profit declined amid increased turnover volume," Mr. Moyeen said.

Another senior official said to ensure buyer's order many factories offer lower price of manufacturing garment compared to the price offered by another one.

"Such imprudent competition leaves a negative impact on the industry," the official said while stressing on a combined strategy of fixing rational manufacturing prices for the sake of overall industry.

The FEKDI has disbursed 10 per cent stock dividend for the year ended on June 30, 2018.

The company disbursed 15 per cent stock and 5.0 per cent cash dividend for 2013-14, 10 per cent stock and 5.0 per cent cash dividend for 2014-15, 10 per cent stock and 5.0 per cent cash dividend for 2015-16 and 15 per cent stock dividend for 2016-17.

The FEKDI, an 'A' category company, was listed with the stock exchanges in 2014. The company's paid-up capital is above Tk 2.04 billion.

The sponsor-directors hold 67.58 per cent shares in the company, while institutions hold 9.86 per cent and general shareholders 22.57 per cent as of December 31, 2018.

The company's share price closed at Tk 19 each on Thursday with a marginal rise of 4.40 per cent or Tk 0.80 on Dhaka Stock Exchange (DSE).

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