50% tannery firms sink to losses in July-March

Out of six tannery-sector firms listed on the capital market, only a single company made earnings growth in the first nine months (July-March) of the recently concluded fiscal year 2022-23.

Meanwhile, another company which closes their accounting year in December, secured lucrative earnings growth in the first six months (January-June) of the current calendar year of 2023.

Of the remaining four companies, one witnessed earnings decline, while the remnant three reported losses in the July-March period of FY23, as per data available on the Dhaka Stock Exchange (DSE).

The six tannery-sector companies are Apex Footwear Limited, Apex Tannery Limited, Bata Shoe Company (Bangladesh), Fortune Shoes Limited, Legacy Footwear, and Samata Leather Complex.

Apex Footwear’s earnings per share (EPS) rose to Tk 6.19 in the first nine months of FY23 from Tk 6.08 in the same period a year earlier, as per a DSE filing.

Omar Faruque, company secretary at Apex Footwear Ltd told The Business Post, “Our local sales increased in the nine months of FY23, while a reduction in production costs helped us stay afloat at the end of the first nine months of the fiscal year 2022-23.

“But, in the January-March quarter, our earnings decreased nearly 60 per cent year-on-year due to increase in raw material prices, devaluation of local currency, and an increase in production,” he added.

Apex Tannery Ltd – a cent per cent export-oriented leather processing and finishing company –s reported an 1800 per cent drop in earnings in July-March of FY23.

The company said its earnings plummeted due mainly to lower sales, increased chemical costs, fixed factory overhead and additional promotional expenses.

The company posted a net loss of Tk 8.22 crore during the period, compared to the profit of Tk 0.42 crore made in the corresponding period last year.

Bata Shoe Company (Bangladesh), however, outshined its peers, as the company’s net profit jumped by 31.37 percent year-on-year to Tk 43.87 crore in the first half (January-June) of 2023 riding on higher growth of revenue.

The multinational company's earnings per share (EPS) rocketed to Tk 32.07 in the January-June period of 2023, up from Tk 24.41 in the same period of 2022, according to the company's unaudited financial statements.

The earnings per shares (EPS) of Fortune Shoes, another listed tannery-sector company, stood at Tk 1.23 in July-March of FY23, a drop of 49 per cent from Tk 2.42 reported for the same period the year before.

The company’s profit after tax during this period was Tk 20.99 crore, compared to Tk 41.30 crore in the same period of the previous year.

The remaining two companies – Legancy Footwear and Samata Leather Complex – also posted significant losses.

legancy footwear posted a net loss of Tk 1.17 crore in the July-March period of FY23, compared to a profit of Tk 7.84 lakh reported in the same period of the previous year.

The company’s EPS stood at Tk 0.90 negative for July 2022-March 2023 against Tk 0.06 for for the corresponding period the year before.

Samata Leather, however, did not publish its second and third quarterly financial reports in FY23.

As per its latest quarterly data, the company’s earnings per share (EPS) stood at Tk 0.03 negative in July-September quarter of FY23 against the EPS of Tk 0.02 for the same quarter of the previous fiscal.

In Q1 of FY23, its net operating cash flow per share was Tk 0.05 negative, which was Tk 0.07 negative in the same period of the previous fiscal.