Bata Shoe Company (Bangladesh), for the first time in its business history, has incurred a huge loss in the year ended on December 31, 2020, as sales collapsed due to the coronavirus pandemic.
The footwear maker’s net loss stood at Tk 1.32 billion for the year ended on December 31, 2020, as against a profit of Tk 494 million in the previous year.
“Bata Shoe Bangladesh has been going through a crisis in overall business in 2020 which has pushed the company’s earnings down,” the company said in a filing with the Dhaka Stock Exchange (DSE) on Wednesday.
The company incurred a loss of Tk 96.94 per share for the year ended on December 31, 2020, as against a profit of Tk 36.11 per share for the previous year.
The earnings from the company’s business took a drastic fall due to the loss of retail business during the major festivals of 2020 like Eid-ul-Fitr, Eid-ul-Azha, Durga Puja, and Pahela Boishakh amid countrywide lockdown for the pandemic, said the company.
“About 25 per cent to 30 per cent Bata Shoe’s yearly business comes during these festivals,” the company said.
An estimated 77 per cent of the rural business leaders like dealers and/or wholesalers have been impacted due to Covid-19 which led to the loss of their business, said the company.
The loss of their business resulted in the company’s business going down by 41 per cent for the year ended on December 31, 2020. This is the first time in the history of the company that it took such a devastating drop.
However, the board of directors of Bata Shoe has recommended a 25 per cent cash dividend from the retained earnings for the year ended on December 31, 2020.
This is the lowest dividend declaration by the company in its history. In the previous year, it disbursed a 125 per cent cash dividend.
The final approval of the dividend will come during the annual general meeting (AGM), scheduled to be held on August 12 at 11:00 am using a digital platform. The record date is set for June 22.
The company has also reported net asset value (NAV) per share of Tk 267.94 and net operating cash flow per share (NOCFPS) of Tk 2.26 for the year ended on December 31, 2020, as against Tk 364.65 and Tk 68.66 respectively for the same period of the previous year.
Due to the second wave of Covid-19, the company failed to come back to profit in the first quarter (Q1) of this year.
The company has reported a loss of Tk 3.58 per share for the January-March, 2021 quarter against a profit of Tk 2.07 for January-March, 2020.
The multinational shoe company has been serving local customers since 1962. Shares of Bata, which was listed on the DSE in 1985, closed at Tk 693.20 on Tuesday.