Apex Footwear’s profit increased by 66.5% in FY 2020-212 min read
Apex Footwear Limited, one of the leading footwear companies in Bangladesh has recently published its annual report for FY 2020-21. Total revenue decreased by 0.4% from Tk 11,810.2 Mn in FY 19-20 to Tk 11,764.1 Mn in FY 20-21. However, profit after tax increased by 66.5% from Tk 63.2 Mn in FY 19-20 to Tk 105.3 Mn in FY 20-21.
Total Revenue decreased by Tk 46.1 Mn mainly due to export business. Export business declined by 12.9% from Tk 5,834.5 Mn in FY 19-20 to Tk 5,083.3 Mn in FY 20-21. The decline in export business was mainly due to supply chain issues and changing consumer behavior in the pandemic. The company struggled to ensure smooth order flow from Europe throughout the year to fill its capacity at sustainable prices. In the first half of FY 20-21, Apex sold over 585,184 pair less (26.8%) compared to same period last year. In the second half the sales increased by 302,887 pair more compared to same period last year. Athletic footwears were in demand as the company exported 379,000 pairs in FY 20-21. Total export sales declined from 3,527,533 pairs in FY 19-20 to 3,245,236 pairs in FY 20-21.
Retail domestic business increased by 11.8% from Tk 5,975.7 Mn in FY 19-20 to Tk 6,680.8 Mn in FY 20-21. The performance could have been much better if it was not hindered by the second wave of Covid-19. Due to the strict lockdown regulations, the company missed “Pahela Baishak” and “Ramadan”period which is the most important period in domestic sales. In terms of volume, leather product and synthetic product sales increased by 19.9% and 23.7% respectively.
Profit increased by 66.5% mainly due to higher other income and lower finance costs. Operating profit of Apex Footwear was Tk 1,090.0 Mn in FY 20-21 compared to Tk 1,097.7 Mn in FY 19-20. However, other income increased from Tk 2.0 Mn in FY 19-20 to Tk 4.5 Mn in FY 20-21. Finance cost decreased by 5.3% from Tk 874.9 Mn in FY 19-20 to Tk 828.6 Mn in FY 20-21.
Apex Footwear Limited posted a decent result compared to the uncertain business environment due to the pandemic. However, the company might face further challenge in business due to the omicron variant spread. Europe is the main destination for footwear export and the spread of omicron variant is expected to hamper the export business of Apex Footwear. The domestic business has rebounded well but the risks remain the same.
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