Apex Foods profit jumps 73%, thanks to pricey dollar, cost cutting
At the end of FY23, the company’s net profit stood at Tk5.08 crore, which was 73% higher than that in the previous fiscal. Its earnings per share stood at Tk8.91 in FY23.
When the country's shrimp industry was grappling with dwindling exports, publicly listed shrimp exporter Apex Foods Limited posted a remarkable year-on-year growth in annual profit in the fiscal 2022-23. Reason, dollar appreciation coupled with the company's effective cost minimisation.
At the end of FY23, the company's net profit stood at Tk5.08 crore, which was 73% higher than that in the previous fiscal. Its earnings per share stood at Tk8.91 in FY23.
Pricey dollar was a blessing for Apex Foods
On condition of anonymity, an official at the company said the increase in dollar price, which has been taking a toll on most businesses, turned out to be a blessing for Apex Foods.
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As the company's primary export destination is the USA, a dollar of export revenue from there translated into a substantial amount in the local currency, owing to the strengthened value of the dollar, the official added.
The revenue figure for FY23 has not been disclosed by Apex Foods yet.
Effective cost cutting
In a stock exchange filing on Wednesday, along with the exchange rate support, the company also attributed its profit growth to a decrease in its costs, particularly ocean freight and financial expenses.
The company stated it has been minimising costs since the fiscal 2021-22 and this has significantly contributed to boosting its profits.
Despite a 33% year-on-year decline in revenue to Tk212.18 crore during the July to March period of FY23, the company achieved a remarkable 192% year-on-year growth in profit over the nine-month period, thanks to its effective cost-cutting measures.
Stellar growth, yet investors not happy
Even though Apex Foods registered a handsome profit growth, its dividend declaration remained unchanged. The company recommended a 20% cash dividend for FY23, mirroring the dividend for FY22.
Investors' discontent with the absence of an increase in dividends was evident in the company's share price, which declined by 7.2% to Tk382.20 each on Wednesday at the Dhaka Stock Exchange.
Country's shrimp export
According to industry insiders, Bangladesh's shrimp export has been falling over the years with the western consumers tightening their belts.
Export orders have been on a decline since the onset of the Covid-19 pandemic, a trend that is now exacerbated by the Russia-Ukraine war.
According to the Bangladesh Export Promotion Bureau data, shrimp export fell by 26.27% year-on-year to $300 million in FY23. The export fell short of the $500 million export target by 40%.
In the first three months of the ongoing fiscal, shrimp export declined over 32% to $67.7 million.
