Apex Footwear revenue grows 24% in H1 despite economic turbulence

While the country's economy struggles with high inflation, rising interest rates, energy shortages, and law enforcement challenges, Apex Footwear has managed to achieve impressive growth in both revenue and profit during the first half of this fiscal year.

Company officials said the growth was largely driven by swift management responses to mitigate adverse impacts and efforts to diversify export destinations.

According to Apex Footwear's financial statement, filed with the Dhaka Stock Exchange (DSE) today, its revenue grew by over 28% year-on-year, reaching Tk406 crore in the October-December quarter of FY25, while net profit surged by 33% to Tk3.19 crore.

In the first half of this fiscal year (July-December), Apex posted a revenue of Tk829 crore, the highest in the past five years, marking a 24% increase compared to the same period last year. Net profit also climbed 30% year-on-year to Tk6 crore, with earnings per share standing at Tk3.83.

The company said the increase in earnings per share was primarily due to a reduction of Tk5 crore in operating expenses compared to the same period last year.

However, net operating cash flow decreased as payments to suppliers, employees, and others rose, particularly within the cost of goods sold. 

The increase was mainly driven by higher costs in materials procurement, rising direct labour costs, and increased utility expenses, the company added.

Reflecting on the positive business trend, Apex's shares closed at Tk206, the highest since November of the previous year, at the DSE.

Market analysts say Apex Footwear is anticipated to sustain its growth momentum in the local segment surpassing the Bata Shoe Bangladesh as the company has begun manufacturing and marketing export-quality shoes at reasonable prices for rural customers.

They also highlight Apex Footwear's competitive edge in exports, as it is one of only three Bangladeshi companies certified by the Leather Working Group, the world's leading certification for responsible leather sourcing. 

This certification boosts Apex's credibility with foreign buyers, enabling the company to secure higher prices in export markets.

A senior officer of the company told The Business Standard that despite the ongoing economic challenges, the company's local sales grew, primarily driven by discount offers and increased customer participation during the winter season.  

However, he acknowledged that rising interest rates and the increased cost of imports due to the depreciation of the taka have become significant concerns, prompting the company to implement cost-cutting measures.

Regarding the export market, he explained that the company fell short of its export target last year due to lower orders from key buyers, particularly in Europe and Japan.  

"Orders from these markets remain low, so the company has diversified its export destinations to include the USA, India, and the Middle East," he said.  

He further added, "Apex Footwear has received a positive response from these new markets, contributing to export growth, and we are continuing efforts to expand into additional regions."