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Tuesday, June 25, 2024

Bangladesh stock exchange listed textile mills slip into losses

Due to the various challenges faced by the Bangladeshi textile industry, several stock exchange-listed companies reported losses or a substantial drop in profits.

There are 58 listed textile mills in Bangladesh of which 30 have shared their financial reports to date for the first six months of fiscal ending December 31, 2023.

Of these 30, 11 have slipped into losses, while nine have posted a decrease in profits while the profit of one textile mill remained stable and nine mills reported a hike in profits.

“Most textile mills have not been in good shape since June last year due to a fall in demand for garments,” media reports quoted Bangladesh Textile Mills Association (BTMA) CEO Monsoor Ahmed as saying.

“Additionally, significhikeshike in gas prices, rising finance costs, and an increase in other associated costs have pushed textile mills in to a tight corner,” Ahmed stated.

BTMA President Mohammad Ali Khokon was quoted as saying that the 150 percent hike in gas prices along with a 50 percent increase in wages, had inflated overhead costs of textile mills, making it difficult to maintain profitability.

The Bangladesh government had increased gas prices by 150 percent for large industries in February last year on the condition that they would receive an uninterrupted gas supply.

Khokon stated that due to the continuation of shortage of gas, their production capacity has fallen to 40 percent in 2023.

The bank interest rate in Bangladesh is also going upwards and has risen from 9 percent in July 2023 to 12.43 percent in February 2024.

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