Square Textiles' profit rises 37% in Q2

Square Textiles PLC's profits grew by around 37 percent year-on-year in the October-December period of the current financial year.

The yarn manufacturing and marketing company made a profit of Tk 24.83 crore in the period in FY24 compared to Tk 18.07 in the same period in the last fiscal year, according to its unaudited financial statement.

Square Pharma reported earnings per share (EPS) of Tk 1.26 in the second quarter of FY24 against Tk 0.92 a year ago, according to a disclosure published on the Dhaka Stock Exchange on February 1.

Square Textiles said its EPS increased due to increased yarn production from its new project at Habiganj as well as due to balancing, modernisation, rehabilitation and expansion (BMRE) activities for its subsidiary, Square Texcom Ltd.

Square Texcom's products include cotton yarn, polyester, synthetic yarn, wool yarn, and blended yarn mixed with cotton and polyester.

Considering the entire July-December period of FY24, Square Textile's profit grew by 8 percent year-on-year, to Tk 60.2 crore. Its profit was Tk 55.6 crore in the same period the previous year.

The company's consolidated EPS rose to Tk 3.05 in the July-December period compared to Tk 2.82 in the same period a year ago.

Its net operating cash flow per share surged to Tk 7.21 in the first half of FY24 from Tk 2.90 a year ago while its net asset value per share inched up to Tk 48.98 on December 31 last year compared to Tk 48.93 in June of the same year.

According to Square Textiles' unaudited financial report, sales of yarn increased 21.33 percent year-on-year to Tk 972.4 crore in the July-December period last year.

The company's costs for raw materials increased in the first half of FY24 against increased production of yarn.

Raw material costs increased by 20.56 percent to Tk 849.7 crore during the period.

Besides, fuel, gas and electricity costs increased significantly due to the prevailing gas and electricity crisis.

The company spent Tk 96.7 crore on fuel, petrol, diesel, electricity, gas and water during the period, a 32.6 percent year-on-year increase.

However, net profit after tax fell by about 40 percent year-on-year to Tk 1.07 crore in FY23, according to its latest annual report.

An analysis of the company's financial statements showed that while turnover, mostly exports, fell only marginally during the current year, the cost of production increased due to increased import prices of raw materials and supplies, resulting in a decrease in net profit.

At present, the total installed production capacity is 129,262 spindles. A spindle is a straight spike, usually made from wood, used for spinning, twisting fibres such as wool, flax, hemp and cotton into yarn.