Despite a 34% surge in export earnings in FY26, Apex Footwear Limited, the country’s leading shoe maker, made just Tk1.41 crore in profit from exports, translating into a wafer-thin margin of around 0.16%, according to its audited financial statements.
Export revenue rose to Tk890 crore in the financial year ended June 2026, from Tk663 crore in FY25. But higher production costs, financing expenses and tax liabilities largely offset the sales growth.
The contrast with smaller competitors is stark. MK Footwear PLC, listed on the Dhaka Stock Exchange’s SME platform, earned Tk5.61 crore in profit against Tk90 crore in export revenue in FY26, achieving a margin of 6.29%. In FY25, it earned Tk8.76 crore from exports of Tk79 crore.
Craftsman Footwear and Accessories Limited also reported a 5.83% export margin in FY25, earning Tk4.32 crore against revenue of Tk74 crore.
Apex’s export profitability has remained modest over the years. It earned Tk3.17 crore from exports of Tk508 crore in FY21 and Tk5.87 crore on Tk714 crore in FY23. Exports fell to Tk482 crore in FY24 before recovering to Tk663 crore in FY25, when profit plunged to Tk0.37 crore. It recovered to Tk1.41 crore in FY26.
The company’s cost of goods sold rose 39% to Tk791 crore in FY26, while finance costs increased 49% to Tk58.90 crore. Although it cut export-related marketing and selling expenses by 44%, higher production and borrowing costs continued to squeeze margins.
Taxation added to the pressure. An analyst at an asset management company said Apex earned Tk10.79 crore in pre-tax profit from exports but incurred Tk12.65 crore in tax expenses. A Tk3.27 crore deferred tax adjustment income helped offset the shortfall, leaving a net export profit of Tk1.41 crore.
The analyst said the figures point to inadequate returns from the company’s export business despite substantial sales growth.
A senior company official attributed the thin margin largely to tax deducted at source (TDS) on export proceeds. Banks deduct the tax before depositing export earnings into exporters’ accounts, but the amount withheld does not necessarily match their actual tax liability for the accounting period.
The analyst said footwear exporters pay TDS equivalent to 1% of export value. Although it can be adjusted against final income tax liability, the deduction is non-refundable. Exporters therefore cannot recover any excess if their final tax liability is lower, further squeezing margins.
Apex’s domestic operations performed better, with local revenue rising 10% to Tk1,218 crore and profit increasing 7% to Tk14.11 crore in FY26.
Overall, the company’s revenue grew 19% to Tk2,108 crore, crossing Tk2,000 crore for the first time, while total profit rose 15% to Tk15.53 crore.
To ease its financing burden, the board has decided to raise up to Tk500 crore through redeemable preference shares to refinance existing loans, subject to shareholder and Bangladesh Securities and Exchange Commission approval.
At the end of FY26, Apex had Tk310 crore in long-term loans, Tk260 crore in lease liabilities and Tk2,078 crore in short-term loans. The proposed fundraising is intended to repay existing debt and reduce financing pressure.
The board also recommended a 30% dividend for FY26, comprising 15% cash and 15% stock, down from 50% in FY25.
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