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Wata Chemicals reported a 32 per cent decline in profit for third quarter (January-March), compared to the corresponding period in the previous year, largely due to lower sales coupled with escalating finance expenses.
Wata Chemicals, a producer and seller of a variety of acids, turned a profit of Tk 7 million in January-March quarter this year as against over Tk 10 million for the same quarter last year.
Accordingly, the company's earnings per share stood at Tk 0.47 for third quarter, down from Tk 0.69 for the same quarter a year before, according to a stock exchange filing on Thursday.
According to the company secretary, Shamsul Huq, although the costs of sales came down, the demand for their products across various sectors witnessed a significant decline, leading to lower profit.
And the finance expenses have increased substantially owing to rising interest rates although selling and administrative costs decreased due to cost-cutting measures.
The company's profit for the nine-month period also dropped almost 32 per cent year on year to Tk 15 million from Tk 22 million in the same period of the previous year, primarily due to lower demand for their products.
The company's sales have plummeted 31 per cent year on year to Tk 536 million in nine months through March this year.
The chemical manufacturer, which sells products mainly to local small and medium enterprises (SMEs), faced a decline in sales since the Russia-Ukraine war began as many small companies resorted to partial operations to survive, while some others closed down their operations temporarily.
The cost of sales, which includes all associated costs to produce products, stood at Tk 364 million, which was nearly 68 per cent of total revenue in nine months through March this year, down from 74 per cent of total revenue in the same period of the previous year.
The net operating cash flow, a measure of a company's ability to generate cash from its operations, stood at Tk 6.12 per share in nine months through March, as against Tk 10.47 in the same period a year before due to lower collection of sales.
The net asset value, which refers to the excess of total assets over total liabilities, dropped to Tk 61.96 per share as of March this year, down from Tk 62.51 in the same period last year.