Towellers Limited, a leading textile manufacturer and exporter, has announced its financial results for the half-year ended December 31, 2024. The company reported a profit of Rs. 201.5 million, marking a significant 66% decline compared to Rs. 604.8 million in the same period last year. Earnings per share (EPS) stood at Rs. 11.85, down from Rs. 35.58 in December 2023.
Following the announcement, Towellers’ stock price dropped by 10%, or Rs. 15.5, reflecting investor concerns over the company’s declining profitability and challenging market conditions.
Towellers’ net sales for the half-year reached Rs. 6.88 billion, a 3.2% increase from Rs. 6.66 billion in the corresponding period last year. However, the cost of sales rose by 7.6% to Rs. 6.18 billion, resulting in a gross profit of Rs. 693.5 million, down 24.4% from Rs. 917.4 million in December 2023.
The company’s operating profit also declined sharply to Rs. 274.7 million, compared to Rs. 759.1 million in the previous year. This was primarily due to higher distribution costs, administrative expenses, and lower other income.
Towellers faced increased operational costs, with distribution expenses rising to Rs. 267.5 million from Rs. 168.1 million, and administrative expenses climbing to Rs. 218.4 million from Rs. 183.8 million. Other income also fell significantly to Rs. 94.1 million, down from Rs. 239.1 million in the same period last year.
The company generated Rs. 52.5 million in cash from operating activities, a huge decline from Rs. 1.87 billion in the previous year. Towellers did not declare any cash dividends, bonus shares, or right shares for the period.
Despite the challenges, Towellers remains focused on maintaining its market position and improving operational efficiency. The company continues to invest in its capital work-in-progress, with Rs. 670.7 million allocated for land, building, and machinery.
Towellers’ performance highlights the challenges faced by the textile industry amid rising costs and economic pressures. The company’s ability to navigate these challenges will be critical to its future growth and profitability.
