Pandemic-hit shoemaker Bata skids into huge losses in Bangladesh

  • Farhan Fardaus, Staff Correspondent,
    Published: 2021-06-03 03:06:04 BdST

The coronavirus pandemic has plunged Bata Shoe Limited into its worst ever losses since the company entered the Bangladesh market before independence.

The business of one of the leading footwear companies in the country dipped as it missed the two Eid festivals, Puja, Pahela Baishakh, and other festivals, during which the firm records 30 percent of its annual sales, when the country went into a lockdown over the outbreak last year.

In 2020, Bata’s annual loss rolled past Tk 1.32 billion, or Tk 96.94 percent per share.

The price of its share was unchanged at the floor price of Tk 693.2 on Wednesday when it published the latest financial statement.

“Bata Shoe has never done so bad since the beginning of its operation in Bangladesh. Sales rose every year,” said Iftekhar Mallick, head of marketing at Bata.

Its revenue fell by 41 percent in 2020, the highest year-on-year drop, according to Company Secretary Hashim Reza.

He hopes the company will bounce back from the losses if the coronavirus situation does not worsen.

Despite the loss, the popular shoemaker has not disheartened its investors. Listed as a leather sector company on the stock market, it has announced 25 percent cash dividend for the shareholders for the year 2020.  It gave 125 percent dividends in 2019.

Although infections dropped in the first months of 2021, the losses continued. Bata posted Tk 3.58 loss per share in the first quarter of the year.

In the same period last year, just before the pandemic hit Bangladesh, its earnings per share were Tk 2.7.

At the end of 2020, its Net Asset Value per share stood at Tk 267.94. The company posted Tk 364.65 NAV per share in 2019.

The plunge in sales due to the COVID-19 outbreak, however, hampered its cash-generating cycle resulting in a negative impact on the Net Operating Cash Flow Per Share, which dropped to Tk 2.26 from Tk 68.66 per share in 2019.

Out of its 13.68 million shares, the directors own 70 percent, institutional investors 19.41 percent, foreigners 0.181 percent and general investors 8.78 percent.

With a Tk9.48 billion market capital and Tk 136.8 million paid-up capital, Bata’s reserves stand near Tk 4.8 billion.