White goods company switches to local raw material

It comes following ban on imports by durable goods manufacturing industry

KARACHI:

Waves Home Appliances – the manufacturer and marketer of white goods ranging from microwaves to deep freezers – has switched to local raw material to ensure the continuity of its business following the recent ban on imports by the durable goods industry.

The company in its detailed half-yearly financial report for the period ended June 30, 2023, sent to the Pakistan Stock Exchange (PSX) on Tuesday, said that in response to policy changes permitting the import of materials and components by the home appliances industry and the slow processing of Letters of Credit (LCs) opening by commercial banks, “we have sought to ensure the continuity of operations by striving for significant import substitution.”

“In line with this, WHALE has shifted to sourcing materials locally, decreasing reliance on imports and promoting the development of certain imported components domestically.” It reported that its products, especially deep freezers and vizi-coolers, had significant corporate sales potential, particularly for businesses like Coca-Cola and the broader frozen food and beverages industry. “Amid these challenges, we remain fully focused on maintaining the continuity of operations.”

The company reported a drop in its sales and profits due to the recent partial availability of imported goods and the fall in demand amid high inflation. “However, it may be noted that gross margins have substantially improved,” the company said in its half-yearly report.

Indicating that the company has faced a tough situation amid current economic conditions, its net sales significantly decreased to Rs2.47 billion in the six-month period compared to Rs5.58 billion in the same period of last year.

Accordingly, its net profit slumped to Rs72 million compared to Rs290 million in the corresponding period of last year.

This variance is primarily due to the challenging economic and financial environment, where supply was constrained and demand was restricted due to the prevailing recessionary situation, the company said.

The company has recently gone through the Scheme of Arrangement wherein the home appliances business from Waves Corporation Limited, formerly Waves Singer Pakistan Limited, was acquired and merged into the company.

The scheme was sanctioned by the Lahore High Court on May 27, 2022. The effective date of the scheme is August 31, 2021.

 

Published in The Express Tribune, August 23^rd, 2023.

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