Raw material price hike eats into KDS Accessories profits
Skyrocketing raw material prices worldwide have dragged down the profit of KDS Accessories – a manufacturer of garments accessories – despite significant growth in its sales.
The revenue and profit of KDS Accessories – a concern of Chattogram-based KDS Group – grew by 44% and 5% respectively in the fiscal 2021-22 compared with the previous year.
The company declared a 16% cash dividend, up 1% from the previous fiscal year.
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It will hold the annual general meeting on 24 November. The company has fixed 1 November to identify its shareholders for cash dividend entitlement.
According to sources in KDS Accessories, its revenue exceeded the pre-pandemic level in the last financial year.
"Revenue increased due to good demand for products from customers. However, profits have not increased at that pace as the global raw material prices have gone up drastically," Company Secretary Manjure Khuda told The Business Standard.
"Global raw material supply chains have been disrupted, causing raw material prices to rise by nearly 55%."
In fiscal 2018-19 before the onset of the Covid-19 pandemic, the revenue of the company was Tk230 crore, and the profit was Tk13.84 crore.
The revenue increased to Tk319.96 crore in FY22, up from Tk221.79 crore in the previous year. And the profit after tax rose to Tk16.57 crore, a slight increase from Tk15.69 crore.
Due to the disruption of global exports during the pandemic, the company's revenue declined drastically. However, due to the decrease in coronavirus infection, the revenue rose thanks to an increase in demand for its products in the fiscal 2020-21.
KDS Accessories manufactures all types of garments accessories such as corrugated cartons, buttons, hangers, gum tapes and soft line printing products – labels, elastics, and offset printings.
It supplies materials to major retailers like Wal-Mart, Tesco, Decathlon and so on.
KDS Accessories went public in 2015 by raising Tk24 crore from the stock market through an initial public offering.
It has two factories in Gazipur and Chattogram. Using the IPO funds, the company established the third unit of its Gazipur factory.
On Sunday, its shares closed at Tk77.50 each on the Dhaka Stock Exchange (DSE).
