Apex Footwear’s export drops 32% in FY24

Infographics: TBS

Apex Footwear Limited has reported a 32% drop in exports for the fiscal year 2023-24, primarily due to weakened demand in key markets such as the US, Europe, and Japan. 

According to the company's financial statement, exports fell to Tk481.86 crore, down from Tk713.85 crore in the previous fiscal year.

However, Apex Footwear achieved 8% growth in local sales, reaching Tk1,015.95 crore, compared to the previous year.

Its total revenue stood at Tk1,497.81 crore in FY24, which was 9.43% lower from the previous fiscal year.

Omar Faruque, company secretary of Apex Footwear, told The Business Standard that the company faced a downturn in exports due to weakened demand in key markets such as the US, Europe, and Japan.

"Despite high inflation, we performed well in local sales, which has left the company pleased with its overall performance," he added. 

Despite a decline in revenue, the company achieved a profit growth of 5.56%, reaching Tk 17.64 crore – the highest profit in the last nine years – during the last fiscal year compared to the previous year.

Omar Faruque stated that they successfully reduced the cost of purchasing raw materials, which contributed to a decrease in the cost of goods sold. 

Additionally, the government's reduction of the tax at source on exports from 1% to 0.5% has further lowered costs, ultimately boosting the company's profits. 

However, he noted that rising interest rates could pose greater challenges in the future.

Meanwhile, Apex Footwear said in its disclosure on the Dhaka bourse, its board has recommended a 35% cash dividend and a 10% stock dividend. 

"The stock dividend is intended to improve capital adequacy, utilising retained earnings as paid-up capital," said the company in its statement. 

Following the dividend declaration, its share price rose by 1.29% to reach at Tk243.

According to the statement, Apex posted earnings per share of Tk12.34, a net asset value per share of Tk474.37, and a net operating cash flow per share of Tk182.55.

To approve the dividend, the company will conduct the annual general meeting on 27 November, and the record date is set on 22 October for the meeting.

Market insiders said, Apex has announced stock dividends for three consecutive years to increase its paid-up capital.

In 2021, the Bangladesh Securities and Exchange Commission (BSEC) issued a directive stating that the paid-up capital for any company listed on the main board of the stock market must not be less than Tk30 crore. 

The BSEC also set a deadline for listed companies with capital below this threshold to raise their capital. However, many companies failed to meet this requirement within the specified timeframe and requested additional time from the BSEC to comply.

Over the years, numerous companies have been increasing their paid-up capital by issuing stock dividends and rights shares to adhere to the BSEC's regulations. In line with this effort, Apex Footwear has announced a stock dividend, said insiders.

According to data from the Dhaka Stock Exchange, Apex Footwear's current paid-up capital stands at Tk14.30 crore. Following the approval and distribution of the declared stock dividend, this capital is expected to rise to Tk15.5 crore, according to market insiders.

Apex Footwear Ltd was established in 1990 as an export-oriented factory. In 1993, the company was listed on the Dhaka Stock Exchange and it invested in backward linkages. By 1996, Apex had established an effluent treatment plant.

By 2018, Apex had become the largest retail chain in Bangladesh, boasting over 250 stores nationwide, according to its website.