From the Newsroom*
São Paulo – In the first quarter this year, Azaléia, one of the largest shoe manufacturers in Brazil, posted its highest net profit for the period in the last ten years. The amount was 79.4 million Brazilian reais (US$ 39.4 million), a 735.8% increase over the same months in 2006. According to information disclosed by the company, the performance was a result of product development, investment in technology, and control of production costs.
Gross revenues from sales totalled 253.9 million reais (US$ 125.6 million) in the first three months this year, representing a 13.3% increase over the same period in 2006. The greatest increase in revenue was recorded in the domestic market, where sales grew by 24.8% to reach 230 million reais (US$ 114.2 million). Exports, on the other hand, saw a 40.3% decrease during the period, due to the depreciation of the dollar against the real, which is the Brazilian currency.
Azaléia is a leading Brazilian shoe manufacturer which exports to countries in the Arab world. According to information provided by the company, though, the goal of Azaléia is to put an end to the decline in revenues from exports, which started in 2004, by adapting itself to the current Brazilian exchange rates. The EBITDA increased by 82.9% between January and March, and stood at 34.2 million reais, compared with 18.7 million reais in the first quarter of 2006.
During that period, Calçados Azaléia Nordeste S.A (the northeastern Brazilian arm of the company) bought a 22.82% stake previously owned by Banco Santander Banespa. "Our efforts in expense control, exports repositioning, and domestic market growth resumption carried out over the last two years are yielding results now," said the company director, Paulo Santana, in a statement.
Sales were boosted, according to Azaléia, by product diversification, with the launch of new brands, such as A/Z, turned to the female public in the A and B socio-economic classes, and OLK, a line of shoes and accessories for young adults. The brands Azaléia and Dijean have also launched specific products for Brazilian regions such as the south and the northeast. The company, under the Olympikus brand, is also sponsoring the Pan American Games, to be held this year in the southeastern Brazilian city of Rio de Janeiro.
*Translated by Gabriel Pomerancblum
