Aftab Automobiles Limited experienced a notable setback as its share price at the Dhaka Stock Exchange (DSE) plummeted by 9.33% on Monday. The decline was attributed to the company’s substantial loss reported during the July to September quarter of the 2023-24 fiscal year. The closing share price stood at Tk27.2 apiece, down from Tk30 in the previous session, marking a 24% reduction since December 2022. The diminishing appeal to investors is aligned with Aftab Auto’s recent business downturn.
The financial disclosure posted on the DSE website revealed that Aftab Auto incurred a loss of Tk6.86 crore in the first quarter of the current fiscal year, a stark contrast to the Tk0.11 crore profit recorded in the same period of the previous fiscal year. Additionally, the company’s revenue witnessed a substantial 69% decrease, falling to Tk10.44 crore in the first quarter of FY24 compared to the Jul-Sep quarter of FY23.
In its financial statement, Aftab Auto pointed out that the revenue decline was primarily influenced by two factors: changes in chassis models and persistent challenges related to the dollar crisis impacting the opening of letters of credit (LC). The introduction of new chassis models significantly contributed to the sales decline, as customer adaptation to these changes necessitates a transitional period, potentially resulting in a temporary downturn in sales.
Furthermore, the company addressed the issue of the dollar crisis affecting LC openings, emphasizing the challenges it poses to their business operations. Despite these challenges, Aftab Auto paid a 10% cash dividend to its shareholders (excluding sponsors and directors) for FY23 in November 2023.
