Hifsa Raja

Service Global Footwear Limited’s sales revenue increased 42.3% year-on-year to Rs3.59 billion in the first quarterof the calendar year 2023 (1QCY23). This significant increase in sales can be attributed to the company's efforts to expand its market share, improve its distribution channels, and introduce new products. Similarly, the company’s gross profit increased by 24.56% to Rs710 million in 1QCY23 from Rs570 million in 1QCY22. The rise in gross profit can be attributed to several factors, including a boost in sales, improved cost control measures, and more streamlined and effective production methods.

Likewise, the profit-before-taxation also increased 20.6% to Rs324 million from a profit-before-tax of Rs269 million in 1QCY22. Also, the profit-after-taxation also increased 17.66% to Rs250 million in 1QCY23 from a post-tax profit of Rs212 million in 1QCY22. The company's improved profitability suggests that it has been successful in optimising its operational expenses such as administrative and financial costs, while simultaneously increasing its revenue.

Performance in 2022

Service Global Footwear Limited’s gross profit increased 67% to Rs11 billion in 2022 from Rs7 billion in 2021. Similarly, the company’s operating profit increased by 84% to Rs1.37 billion in CY22 from Rs748 million in CY21. The profit-before-taxation jumped 20% to Rs687 million in CY22 from a profit-before-tax of Rs572 million in CY21. This increase is mainly due to the increased gross profit, lower finance cost, and other expenses. However, the profit-after-taxation declined 15% to Rs342 million in CY22 from a post-tax profit of Rs403 million in CY21.

Earnings per share (EPS)

The earnings per share of the company stood at Rs1.67 during the year ended December 31,2022 as compared to Rs2.10 in 2021, reflecting a decrease of 20%. The main reasons for reduction in EPS were escalated input prices, higher international freight costs and increase in minimum wage. The management, however, is making every possible effort to improve the profitability of the company.

The business has made investments in the growth of a reliable product line for safety footwear. The company now has a number of current era (CE) marked products that will be sold in Europe in 2023 and beyond. The establishment of a Chinese subsidiary called Dongguan Service Global Limited has expanded the company's operations in China. The company now has its own sales office, development centre, and procurement setup in the centre of the world's footwear sourcing.

Service Global Footwear Limited now has a significant competitive advantage over other regional manufacturers on a number of fronts, including technology, development effectiveness, cost management, and sales motivation.

About the company

Service Global Footwear was incorporated as a public limited company on July 19, 2019 under the Companies Act, 2017. Its principal activities are manufacturing, sale, marketing, import and export of footwear, leather and allied products. The company is a wholly-owned subsidiary of Service Industries Limited.

Credit: Independent News Pakistan-WealthPk