Bata records 17% revenue dip

BUUMBA CHIMBULU writes COVID-19 related factors, including travel restrictions have led to a decline of 17 percent revenue for Zambia Bata Shoe Company Plc. This company had reported a 17 per cent decline in revenue to K62 million in the first half of the year. In the half year ended June 30, 2020, the company’s revenue fell to K62 million from K74 million in 2019, according to the financial results posted on Lusaka Securities Exchange (LuSE) signed by company Secretary, Carol Milimo-Mulenga. Ms Mulenga indicated that the half year trading conditions were difficult, as the world faced a global pandemic which had not spared Zambia. She said the Government had put in place travel restrictions to try and minimise the spread of Covid-19 from person to person. This, she said, reduced the demand for supplies in major shopping malls and general markets. “The half year reports negative earnings per share compared to the same period last year due to a decline in gross profit, higher retail occupancy and direct store and administration costs and foreign currency loss booked in the period,” she said. During the period under review, Ms Mulenga said revenue in retail declined by 30 per cent compared to last year. In addition, non-retail revenue declined 43 percent due to less export to Zimbabwe in the period as a result of lower requirements from its counterparts. “Gross margin declined by 27 per cent as selling prices were offset by unfavourable changes in foreign currency leading to higher landed cost of goods. “Selling and administration costs were five per cent below last year. The drop can be attributed to reduction in variable costs linked to the sales,” Ms Mulenga said. She said the store occupancy compared to last year were up two  percent, attributed to United State  dollar rentals affected by the depreciation of the Kwacha to a dollar. Other expenses were up 12 per cent attributed by the exchange loss as the kwacha continues to depreciate against the dollar. “Within a global environment that is increasingly unpredictable, we will not be distracted in the second half of the year from executing our operational priorities; Increasing the footfall in the stores, expense control, product innovation, and cost reduction,” Ms Mulenga said. The Sun