The leather sector of Bangladesh has experienced a favourable start to 2024. Most companies in this sector have shown growth in their business in the first quarter (January-March) of this year, reporting significant net profits even after covering various expenses.
Major companies, especially those listed on the stock exchange, have reported strong income and profits during this period.
Even companies that had been incurring losses for years have returned to profitability, an analysis of the latest unaudited financial reports of listed companies has revealed.
Favourable conditions, seasonal demand boost growth
Industry insiders attribute this growth to a favourable business environment at the beginning of the year, pointing out increased sales volumes and higher selling prices during this time.
The reopening of schools and colleges, increased demand during the winter season, and the festive atmosphere of Eid-ul-Fitr have particularly boosted the business of shoe manufacturers, they said.
There are six companies in the leather sector listed on the country's stock market: Apex Footwear Limited, Apex Tannery Limited, Bata Shoe Company (Bangladesh) Ltd, Fortune Shoes Ltd, Legacy Footwear Limited, and Samata Leather Complex Ltd.
Except for Samata Leather, all these companies have published their unaudited financial reports for January-March, 2024.
Apex Footwear reports strong revenue, profit growth
Apex Footwear Limited, the largest capitalised company in the country’s leather sector, reported a revenue of Tk 394.90 crore in the first three months of 2024, compared to Tk 361.22 crore in the same period last year, marking a 9.30 per cent increase.
The company's net profit after tax for this period was Tk 1.63 crore, up from Tk 1.26 crore in the previous year, reflecting a 29.56 per cent rise.
Apex Tannery turns profit with higher revenue, cost cuts
Another company under the Apex Group, Apex Tannery Limited, recorded a revenue of Tk 22.42 crore from January to March, up from Tk 19.27 crore in the same period last year.
The company's net profit for the period was Tk 1.67 crore, a significant improvement from the net loss of Tk 2.40 crore in the previous year.
Apex Tannery's management attributed this improvement to increased product selling prices in the first three months of the year.
They also noted that reducing production costs and increasing sales volume helped them overcome previous losses.
Bata Shoe achieves strong Q1 growth
The only multinational company in the listed leather sector, Bata Shoe Company (Bangladesh) Ltd, reported revenue of Tk 280.49 crore in the first three months of this year, up from Tk 244.84 crore in the same period last year, reflecting a 14.56 per cent increase.
The company's net profit for this period was Tk 18.36 crore, compared to Tk 13.62 crore in the previous year, marking a 34.74 per cent rise.
Bata Shoe's management said that the significant profit growth was due to increased revenue in the first three months of the year.
They noted that the reopening of schools and colleges, higher demand during the winter season, and the festive atmosphere of Eid-ul-Fitr played crucial roles in boosting their earnings.
Fortune Shoes alone reports drop in revenue, profit
In the first three months of this year, Fortune Shoes Ltd reported a revenue of Tk 30.16 crore, down from Tk 40.60 crore in the same period last year.
The company's net profit for this period was Tk 98 lakh, compared to Tk 1.56 crore in the previous year, marking a 37.43 per cent decrease.
Among the listed companies, Fortune Shoes was the only one to see both revenue and profit decline during this period.
Legacy Footwear sees Q1 revenue increase but higher losses
In the first three months of this year, Legacy Footwear Limited reported a revenue of Tk 13 lakh, up from Tk 4 lakh in the same period last year, marking a 225 per cent increase.
Despite the higher revenue, the company's losses also increased during this period. The net loss was Tk 28 lakh, compared to Tk 17 lakh in the previous year, reflecting a 62.37 per cent increase in losses.
