Walton Hi-Tech Industries PLC, the leading electrical and electronics manufacturer, is going to establish a manufacturing facility for high-quality lithium-ion cells, reducing import dependence and offering competitive, locally manufactured products, it said today.

The estimated cost of the project is Tk 113.66 crore. 

"The initiative aims to establish a sophisticated manufacturing facility for high-quality lithium-ion cells, reducing import dependence and offering competitive, locally manufactured products, with commercial production expected to commence by mid-2026," Walton said after its board approved the scheme along with its third-quarter unaudited earnings.

"As a pioneer in producing lithium-ion battery cells, Walton will not only foster technological innovation and set a benchmark for quality and sustainability but also reduce reliance on imports, create new employment opportunities, technological growth, and exports."

Walton said its net profit fell around 8.5 percent year-on-year to Tk 696 crore for the July-March period of the financial year 2024-25 due to multiple factors.

High inflation and tighter global financial conditions impacted its operational environment.

Furthermore, increased material costs, a volatile global market, higher finance costs, and the devaluation of the Taka against foreign currencies have drastically inflated input costs, it said.

Also, a hike in the value-added tax (VAT) rate to 7.5 percent on refrigerators and the introduction of a 7.5 percent VAT on air conditioners have added to the cost pressures, said the company in a press release.

Consequently, Walton's operating profit margin for the July-March period of FY24-25 decreased to 22.09 percent from 24.73 percent in the same period last year.

The finance cost as a percentage of sales also rose to 7.29 percent from 6.14 percent, driven by increased borrowing costs and the devaluation of the local currency against the US dollar, the company said.

Walton's earnings per share stood at Tk 22.99 during the July-March period of this financial year, down from Tk 25.17 a year ago.

Its net operating cash flows per share for the nine months stood at a negative Tk 1.83, a significant drop from the positive Tk 22.88 in the previous year.

The company attributed this decline to a strategic shift in working capital management, prioritising payments to suppliers using customer collections over bank borrowings.

Increased payments to suppliers and higher payments for income tax and VAT, aligned with anticipated sales growth, also contributed to this change.

However, Walton said it is optimistic about the fourth quarter of the current financial year, anticipating healthier profits due to the peak sales season.