Bata Pakistan Limited, a leading footwear manufacturer and retailer, has announced its financial results for the year ended December 31, 2024, reporting a net profit of Rs850.7 million, a 7.2% decline from the Rs 916.3 million profit recorded in the previous year. The company’s revenue also dipped by 4.8% to Rs 18.3 billion, down from Rs 19.3 billion in 2023, as it faced challenges from rising costs, inflationary pressures, and a slowdown in consumer spending. Despite these headwinds, Bata Pakistan managed to maintain profitability, supported by cost management and operational efficiencies.
The decline in revenue can primarily be attributed due to reduced consumer demand and competitive pressures in the retail sector. However, the company managed to improve its gross profit margin slightly, with gross profit standing at Rs9.01 billion, compared to Rs9.15 billion in 2023. This improvement was driven by better cost control in production and supply chain operations as per the company.
The company’s net profit for the year stood at Rs 850.7 million, down from Rs 916.3 million in 2023. Earnings per share (EPS) also declined to Rs 112.53, compared to Rs 121.20 in the previous year. The decline in profitability was attributed to higher distribution costs, which rose to Rs 5.29 billion, and increased administrative expenses, which climbed to Rs 1.89 billion. Finance costs, however, decreased to Rs669.6 million from Rs 753.2 million, reflecting the company’s efforts to manage its debt more efficiently.
Since the announcement of its financial results, the company’s share price has gone up by Rs 5, a slight increase of 0.29%. Contrarily, the previous month saw a sharp decline in the company’s trading volume and price, with the share price falling by more than 11% since February 4th.
Bata Pakistan’s performance in 2024 reflects the challenges faced by the retail sector in Pakistan, where inflation and reduced consumer purchasing power have impacted sales. In 2023, the company reported a net profit of Rs 916.3 million, supported by higher revenue and relatively lower operating costs. However, in 2024, the company faced increased pressure from rising input costs, particularly in raw materials and logistics, which squeezed margins.
Despite the revenue decline, Bata Pakistan managed to maintain its gross profit margin, indicating effective cost management in its production processes. The company’s ability to reduce finance costs by 11.1% also helped mitigate the impact of rising operational expenses.
Looking ahead, Bata Pakistan faces both challenges and opportunities. The company’s focus on cost management and operational efficiency will be critical in navigating the current economic environment. Additionally, Bata Pakistan’s strong brand presence and extensive retail network position it well to capitalise on any recovery in consumer spending.
