Bata returns to profit on discount sales

After suffering losses for one year, the Bata Shoe Company (Bangladesh) Limited has returned to profit in the second quarter of 2021 due to a boost in sales resulting from the discounts offered on their products.

From April to June of 2021, the footwear manufacturer, which has been serving the local customers since 1962, made a net profit of Tk1.57 crore, while it posted Tk73.52 crore loss in the same period of 2020.   

During the period, the company's revenue jumped by 426% to Tk217.07 crore, compared to Tk41.25 crore in the second quarter of 2020.  

Normally, around 25% of the company's business takes place during the Eid festivals, when the sales of the high-value products increases and generates a high margin of profit.

This year, the company could do business during the Eid-ul-Fitr, one of the largest festivals of the country, when retailers usually make a big part of their annual sales. But last year, they could not do it due to the havoc caused by the pandemic.

On the other hand, the company's cost of goods sold increased by 124% to Tk139.55 crore due to the discount sales.

Consequently, its gross profit jumped by 267% to Tk77.52 crore compared with the same period of 2020.   

In 2020, the company posted loss – amounting to Tk132.62 crore – for the first time in its history. Its revenue was Tk508.45 crore that year. 

The company's business was massively affected by the Covid-19 pandemic and its loss per share was Tk96.94 during the year.  

However, on Thursday, the closing price of each of the company's shares was Tk714.30 on the Dhaka Stock Exchange.

The company was listed with the share market in 1985 and has paid-up capital of Tk14 crore.

Bata UK holds 70% percent of the total shares of Bata Shoe Company (Bangladesh) Limited.

Out of the company's total shares, sponsors and directors jointly held 70% institutional investors 19.47%, foreign investors 1.81%, and general investors 8.72%.