Shrimp exporter Apex Foods posted a 13 per cent year-on-year rise in profit to Tk 36.54 million in FY25, driven by renewed international demand that boosted Bangladesh's overall shrimp exports.
While the frozen food exporter's yearly revenue figure has not been disclosed yet, its nine-month revenue was up 3 per cent year-on-year to Tk 1.70 billion in the period to March this year.
The company's finance income also contributed significantly to the overall profit gain, as it jumped 44 per cent to Tk 3.67 million in the nine months to March this year compared to the same period of the previous year.
Company Secretary of Apex Foods Kamrul Islam said profit increased due to higher finance income amid rising interest rates on bank deposits, coupled with higher revenue income. Moreover, a favourable exchange rate and effective cost-minimizing measures also supported profit growth.
In the year to June this year, shrimp exports from the country increased 19 per cent year-on-year to $296 million.
The industry witnessed a return to a growth trajectory after a persistent decline since FY22. Export orders had been on the decline due to the double blow caused by the pandemic and the Russia-Ukraine war, according to sources in the industry.
Hence, the surge in shrimp exports and the company's revenue might have resulted from increased demand from importers.
Industry insiders, however, say the higher value of annual exports was possibly an outcome of higher prices and a stronger US dollar rather than a real increase in export volume.
"Strong dollar turned out to be a blessing for the frozen food exporter, while higher interest rates helped the company achieve profit growth," said Akramul Alam, head of research at Royal Capital.
The dollar-taka exchange rate was Tk 118 in June last year, which increased to Tk 122 in June this year. Therefore, even if the country exported the same quantity of the frozen item, the overall worth of exports would have gone higher due to the appreciation of the dollar against the local currency.
Tariqul Islam Zaheer, senior vice president of the Bangladesh Frozen Foods Exporters Association, said that although shrimp exports rose year-on-year in FY25, overall exports remained lower than expected.
Meanwhile, the stock price of Apex Foods dropped 5.27 per cent to Tk 232 per share on Thursday on the Dhaka Stock Exchange following the announcement of a 20 per cent cash dividend for FY25, unchanged from the year before.
Investors will get Tk 2 per share in cash dividends from the company's profit of Tk 6.41 per share for the year, meaning the company will retain most of the profits, according to a stock exchange filing on Thursday.
The net operating cash flow, a measure of a company's ability to generate cash from its operations, turned negative at Tk 59.16 per share, compared to a positive Tk 23.90 in the previous year. The deterioration was due to lower collection and higher expenses, according to the company.
The net asset value, which refers to the excess of total assets over total liabilities, slid to Tk 126.05 per share as of June this year, from Tk 127.82 a year ago, due to a decrease in the value of investments in the equity market.
Mr Zaheer said the industry was still facing challenges, including lower survival rates, disease control, and competition from other countries such as India. Lack of quality and compliance with international standards are other challenges that curb the growth of the shrimp farming industry.
"Without addressing the fundamental issues like the quality of shrimp fry, disease control, and hatchery regulation, we cannot expect sustainable growth in the sector," Mr Zaheer continued.
Although the challenges are not unique to Apex Foods, its profit margin is significantly lower than that of its listed peer Gemini Sea Foods. Apex Foods' profit margin was 1.58 per cent, while Gemini Sea Foods' stood at 7.61 per cent as of FY24.
Apex Foods, as it claims, is an export-oriented value-added shrimp processing company. It operates a modern shrimp processing plant and exports 100 per cent of its produce mainly to European and North American markets.
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