Gul Ahmed Textile Mills Ltd, one of the renowned brands of clothes and exporters of various textile products, has incurred huge losses of Rs. 452 million in the quarter of January to March due to the lockdown in the local and export markets.
As against the huge losses it recorded in recent months, the company made a profit of Rs. 654 million in the quarter of January to March last year, according to the financial results. However, the prevailing situation hit the businesses of the company, which ultimately pushed it to layoff its employees recently.
The company is witnessing no production activity presently at the factories due to lockdown in line with Covid-19 outbreak whereas its financial capacity has also weakened substantially in the wake of stagnant cash flows.
The company’s export orders were not delivered recently which also hit the earnings of the company besides the expected refund from the government yet to be received by the apparel producers which crippled its financial position ultimately.
As a result of the cease of the production cycle and almost no earnings from the local and exports market, the company could not sustain its profitability that it retained in the first half of the financial year 2019-20.
In the nine-month period of FY20, the company’s profit declined by 77 percent to Rs. 616 million as compared to the previous financial year in which it stood at Rs. 2.7 billion.
Due to the financial crunch, the company retrenched 450 employees recently.
The company is not likely to witness a respite in the near future as the economic slowdown is prevalent in its targeted local and export markets.
Gul Ahmed Textile Limited is one of the leading exporters of the company with more than half of the revenue is driven by foreign markets. The company is employing over 1,000 workers.
The management of the company is looking for government support and relief to come out from the financial quagmire.