Bata business squeezes as pandemic snuffs out Eid sales

Bata Shoe Limited has suffered a huge slowdown in its business due to the coronavirus crisis.

The Bangladesh unit of the Switzerland-based multinational achieved only 15 percent of revenue in the second quarter of 2020 against the revenue of the same period last year.

It does 25 percent of its annual business during Eid-ul-Fitr, but this year the festival fell on May 25 amid a two-month lockdown due to the pandemic, which washed out the opportunity to sell high value products that generate high profit margins.

The loss in revenue finally affected the company’s gross profit as well as pre-tax profit and earnings per share, according to its financial statement published on Tuesday.

In April-June period, the company posted Tk 53.74 negative EPS. Its EPS in the same quarter last year was Tk 15.85.

The company’s EPS in the first half of 2020 was Tk 51.67 in the negative territory against Tk 19.11 in the first half of last year.

The firm had begun to build the stock for Eid three months before the festival as per the plan made in early 2020.

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.

On Tuesday, only 136 Bata shares changed hands with an unchanged closing price at Tk 693.20 on the Dhaka Stock Exchange.

Its net asset value per share stood at Tk 313 in the end of June against Tk 365 a year ago.