Sales and profits of local electronics giant Walton Hi-tech Industries plunged in fiscal year 2022-23, mainly due to the sluggish macroeconomic scenario brought on by the war between Russia and Ukraine.

Walton's sales dropped by Tk 1,531 crore, or 19 percent, to Tk 6,637 crore in the last fiscal year while its profits dropped by Tk 434 crore, around 36 percent, to Tk 782 crore in the 12-month period.

Consequently, earnings per share nosedived from Tk 40.16 to Tk 25.84.

"FY23 was challenging not only for Walton but for all business sectors due to the adverse effects of the Russia-Ukraine war and a hike in the price of US dollars alongside an acute crisis of US dollars in Bangladesh," the company said in its annual report.

As a result, cost of finance increased at an abnormal rate compared to the previous year, which ultimately reduced net profit at an incredible rate, it added.

"We continue to remain cautiously optimistic about the future as the Russia-Ukraine war and the severe crisis of the dollar in Bangladesh are yet to be conclusively overcome," it said.

Walton said in its financial reports that the global economy was forced to absorb huge pressure due to the war in Europe, which started just when the economy was beginning to recover from the effects of the Covid-19 pandemic.

The company's exports were almost halved to Tk 129 crore, according to the financial reports.

The invasion of Ukraine added heavily to inflationary pressure and pushed up prices for consumers, it said.

"Ultimately, both the euro and dollar became stronger against the local currency and the company suffered huge foreign losses on suppliers' repayment."

Walton saw a 54 percent rise in its foreign exchange losses this year. It incurred foreign exchange losses of Tk 469 crore in 2022-23, up from Tk 304 crore the previous year, the reports showed.

The company's sales of fridges, televisions, and home appliances dropped but revenue from air conditioners and electrical appliances rose.

Walton's air conditioner sales rose 39 percent to Tk 646 crore in the last fiscal year.

On the other hand, fridge and refrigerator sales dropped 27 percent to Tk 5,814 crore.

Similarly, its television and home appliance sales fell by 34 percent to Tk 531 crore and by 10 percent to Tk 394 respectively.

"As consumers' purchasing power was hit by higher rates of inflation, they cut down on purchases of luxury items," said Md Rafiqul Islam, company secretary of Walton Hi-tech Industries.

On top of that, prices of most products had to be adjusted to offset the devaluation of the local currency, he added.

"As a result, people are preferring to keep their old fridges or televisions for one or two more years," he said.

Rafiqul also pointed to severe heat waves that had hit the country in the previous year for the rise in sales of air conditioners.