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Bata Shoe Company (Bangladesh) Limited has been successful to revive from the sluggishness in their business as it reported a profit of Tk 1.57 crore for the second quarter (APR-Jun’21) of the current year.
The publicly traded multinational company witnessed 426 per cent hike in its total sale – worth Tk 217 crore -- throughout the April-June period, comparing to the same period of the previous year.
It was in loss in the second quarter of the previous year, which was marred with restrictions inflicted by the Covid-19 pandemic.
The company’s earnings per share (EPS) stood at Tk 1.15 in the second quarter of the current year, when it reported loss per share of Tk 53.74 in the corresponding quarter of the previous year.
The scenario was obtained analysing the footwear giant’s financial statement for the second quarter.
According to the statement, the company’s revenue increased in the quarter thanks to boost in sales and clearance of older merchandise by offering a bulk amount of discount to the customers.
The total value of sold goods of the company rose by 124 per cent in the quarter. As a result, its gross profit also increased by 366 per cent.
However, the company is still in a loss of Tk 3.33 crore when it comes to half-yearly financials. In the previous year, Bata shoe’s loss was even higher as it reported a loss of Tk 70.68 crore over the same period.
The footwear giant’s per share loss stood at Tk 2.44 for Jan-Jun’21 period, against negative Tk 351.67 of the same period of 2020.
According to the latest annual report, around 35 per cent business of the company came during the Eid festivals.
The company reported loss for the first time last year, due to the spread of Covid-19. It incurred a loss of Tk 132.51 crore in FY 20, when it reported a profit of Tk 49.39 crore in FY19.
Despite the fact, Bata provided a 25 per cent cash dividend for the year 2020.
The company has recently introduced a new business model using its pandemic experience.
In this context, the annual report said that the company gave long-term credit to the dealers to maximise the wholesale business and to minimise the chances of losing market share.
As a result, the cash collection to turnover ratio has dropped. This was reflected in the company’s consolidated profit growth which slowed down.
From this experience, Bata pioneered in this industry started to move from dealerships into a distribution model.
The new distribution model is a complete cash model, de-risking receivables from the market. By the end of 2021, Bata is targeting to cater to the entire unorganized market through a distribution model.
As a result, in the first quarter (January-March) of the current year, Bata saw a better business performance, where revenue growth was 12.59 per cent and profit growth was 73 per cent.
In January-March, 2021, Bata’s revenue earning was Tk 184.29 crore, which was Tk 163.68 crore, same time of the previous year.
Meanwhile, profit after tax for January-March of this year was Tk 4.9 crore. In the same period of previous year, it was Tk 2.8 crore.
Bata Shoe Company (Bangladesh) Limited started its operation in Bangladesh in 1962. Currently Bata operates two manufacturing facilities – one in Tongi, Gazipur and the other in Dhamrai, Dhaka.
According to the Bata website, with a production capacity of 1,60,000 pairs of shoes daily, the company annually sells about 3 crore pairs of shoes.
Bata Shoe was listed with Dhaka and Chittagong stock exchanges in 1985. The company’s authorised capital is Tk 20 crore, while its paid-up capital is Tk 13.68 crore, according to DSE data.
