Envoy Textiles’ net profit grows by 147%

Envoy Textiles, the world's first LEED Platinum certified denim manufacturer, has reported a 147% increase in net profit, reaching Tk60 crore in the first half of the current fiscal year.

Its revenue grew by 30% during the July-December 2024 period, according to the publicly listed company's price-sensitive information (PSI). The textile firm released its half-yearly financial report following a board of directors' meeting on Wednesday.

During the July-December 2024 period, Envoy Textiles' revenue rose to Tk898.57 crore, compared to Tk690.95 crore in the same period of the previous fiscal year.

Talking to The Business Standard, Envoy Textiles Mills Ltd Managing Director Tanvir Ahmed said, "The business growth has been driven by full-capacity orders from our buyers, as the international market response has been very positive. Additionally, we have positioned ourselves well with our customers through product quality, product diversification, and excellent customer service."

"We have two offshore marketing offices, which help us increase our market share and secure better prices. Despite the downward trend in cotton prices, we have maintained our pricing due to the superior quality of our products and strong, long-term relationships with our customers. The recent hikes in gas prices, wages, and interest rates have slightly impacted our business; otherwise, growth would have been higher," he said.

The denim miller has already booked full-capacity orders until March and has forecasts extending to mid-April. Typically, denim mills can only book their capacity 15 days in advance.

Company Secretary M Saiful Islam Chowdhury said, "To improve the textile mill's efficiency, the company is investing in BMRE [Balancing, Modernisation, Rehabilitation, and Expansion], particularly by introducing a new generator, which will help enhance our business in the future."

"However, the textile mill faced legal disputes among its board members over the last three years. Some board members attempted to damage the company's reputation, which negatively affected business growth. After resolving these disputes, the board management team is now fully focused on increasing the company's business," he added.

Kutubuddin Ahmed, chairman of Envoy Textiles, told The Business Standard that the textile mill operated at nearly full capacity in the first half of the current fiscal year. He added that most buyers are increasing their orders, suggesting that Envoy Textiles is poised for a better performance this year.

"To add more value, the company is also planning to install a new recycling plant, considering that many brands have set goals to increase the use of recycled yarn by 2030," he said.

The mill can produce 45 lakh yards of denim fabric per month.

On Wednesday, its share price closed at Tk43.40 per share at the Dhaka Stock Exchange (DSE), a 1.36% decline from the previous trading session.

Envoy Textiles recommended a 20% cash dividend for its shareholders for fiscal 2023-24. The company had paid its shareholders a 15% cash dividend for FY23.