Square Textiles Quarterly Profits Grow 945% As Sales, Margin Jump

Company Performance

Square Textiles Quarterly Profits Grow 945% As Sales, Margin Jump

Square Textiles Ltd registered a staggering 945% growth in profit for the first three months of the current fiscal year, thanks to an increase in sales and profit margin. The profit in the July-September period of this year alone was equal to two-thirds of what the listed textile company earned over the entire 2020-21 fiscal year. The company's earnings per share (EPS) shot up to Tk 2.30 in the quarter, which was only Tk 0.22 in the same quarter of 2020 and Tk 3.41 over the 2020-21 fiscal year. The profit jump was caused by increased production and price of the yarn it produces, the company said in its disclosure. Three weeks ago, while disclosing its annual financial results, the company said due to increased price of raw materials, their cost increased and due to a high local and international demand, price of yarn outgrew the costs. That helped to improve the company's profit margin while it also produced more as the modernisation efforts increased the efficiency of its mill. Yarn prices have been rising sharply since early 2021 amid the rising costs of raw material and freight. On the other hand, the textile mills that are enjoying the high demand for their products due to abundant apparel export orders are not bothered too much about the yarn price. That is why, all the competent spinners, especially those who produce relatively higher value yarns, are enjoying the increased sales and profit margins. Yarn price grew by more than one-third this year and nowadays it is at the peak, according to the textile professionals.