FE REPORT
Apex Foods plunged 7.23 per cent year-on-year to Tk 382.20 on Wednesday, becoming the day's top loser on the Dhaka Stock Exchange (DSE), despite reporting a 73 per cent growth in profit for FY23.
An export-oriented shrimp processor, it secured a profit of Tk 50.79 million for FY23, though the revenue fell in the year compared to the previous fiscal year.
The earnings per share stood at Tk 8.91 for the year, up from Tk 5.14 a year ago, according to a stock exchange filing on Wednesday.
The seafood exporter declared 20 per cent cash dividend for FY23, the same as for the previous year.
Company secretary Kamrul Islam attributed the profit growth to the strong exchange rate support, increased finance and other income.
The costlier dollar and cash incentives helped attain a remarkable growth in profit as Apex Foods is a 100 per cent export-oriented company, he said.
A substantial fall in operating and financial expenses and freight charges also contributed to the profit growth.
Mr Islam did not disclose the annual revenue figure but said the data will be there in the annual report yet to be published.
Meanwhile, the company experienced a 33 per cent year-on-year drop in revenue in the nine months through March this year due to a decline in the overall shrimp exports (26% in FY23) for lower demand overseas.
The frozen food export revenue slid to Tk 2.12 billion in the nine months to March this year, from Tk 3.16 billion in the same period a year before.
Apex Foods paid off its long-term debt in FY22, which indicates that the company is in a financially stable position, according to a recent equity analysis by EBL Securities, a top-tier brokerage firm.
The total debt of the company dropped to Tk 18 million as of March this year, which was Tk 312 million until June 2022, leading to a substantial decline in the company's financial expenses.
"This reduction [in liabilities] has greatly boosted the profitability of the company," said EBL Securities.
As a fully export-oriented frozen fish processing company, Apex Foods receives 7-10 per cent cash incentives against export volumes. Major export destinations are North America and European countries.
Cash incentives accounted for around 65 per cent of its total operating profit in FY22.
Any potential withdrawal/reduction of these cash incentives in the future would be a significant setback to the company's overall profitability, according to the EBL analysis.
The net asset value per share increased to Tk 136.20 for FY23, from Tk 126.18 the year before.
The net operating cash flow per share rose to Tk 81.84, from Tk 62.14 due to a decrease in payment during the year as compared to the previous year.
The global shrimp market size stood at around $66 billion in 2022 and is expected to reach $88 billion by 2028, growing at a rate of 4.7 per cent in the next five years, according to a report by EBL Securities.
Presently, there are 105 seafood processing plants in Bangladesh, with 72 registered with the government. These processing plants have a combined capacity of producing 300,000 tonnes of seafood per year.
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