Karachi: Service Global Footwear Limited (SGFL) has reported significant financial outcomes for the nine-month period ending September 30, 2024. According to information available from the Pakistan Stock Exchange (PSX), the company achieved a net sales growth of 8.48%, reaching PKR 12.95 billion compared to PKR 11.94 billion during the same period in the previous year.

In detail, the financial performance of SGFL reflects both growth and challenges in a complex economic landscape. The company's gross profit decreased by 17.37%, totaling PKR 2.18 billion, down from PKR 2.64 billion in the previous year. This decline is largely attributed to increased operational costs due to rising electricity prices and wages, coupled with the appreciation of the Pakistani Rupee which has affected SGFL's competitiveness in the export markets.

Despite these hurdles, SGFL's profit before tax saw an increase, rising by 4.99% to PKR 1.24 billion. The net profit after tax also improved modestly from PKR 791.96 million to PKR 817.31 million. The earnings per share increased from PKR 3.86 to PKR 3.97.

Strategically, the company's investment in Service Long March Tyres (SLM) has been fruitful, contributing PKR 944 million to the profit share. Additional investments amounting to PKR 286 million were made to enhance the production capacity of SLM, aiming to secure more profitable avenues.

Looking forward, the global and Pakistani economies present a mixed bag of gradual recovery and persistent challenges. Inflation is projected to decrease from 6.80% in 2023 to 5.90% in 2024, influenced by lowering energy prices. However, geopolitical tensions and potential disruptions in maritime transport pose risks to global trade. In Pakistan, the new Extended Fund Facility (EFF) from the IMF, amounting to PKR7 billion, is expected to provide some financial stability over the next three years.

Service Global Footwear anticipates leveraging geopolitical shifts in sourcing, particularly post-US elections, to enhance its market position. The potential relocation of footwear manufacturing from China could benefit SGFL, which is poised to capture new customers and increase sales.

In conclusion, despite facing increased costs and a challenging export market, SGFL remains optimistic about its strategic positioning and future growth prospects. The directors extend their gratitude to shareholders, customers, suppliers, and bankers for their continued support.