The Brazilian producer of Ipanema, Grendha, Rider, Melissa and Zaxy sandals reported a 1.0 percent drop in net revenues to 397.0 million reais (€129.60m-$173.81m) for the second quarter ended June 30. In terms of gross revenues, a modest 2.4 percent increase to R$102.9 million (€33.59m-$45.05m) in exports was offset by a 4.6 percent drop to R$385.8 million (€125.94m-$168.91m) in the Brazilian market, which continues to be plagued by economic and political uncertainties.

The depreciation of the Brazilian real produced a positive effect on Grendene's exports, which went up by 18.3 percent in the first half to R$270.7 million (€88.37m-$118.52m), although the number of pairs rose by only 0.8 percent to 24.9 million. Their value in U.S. dollars increased by 4.7 percent in the first half and declined by 4.9 percent in the second quarter.

Grendene's share in Brazil's total footwear exports declined in the first half to 39.1 percent in terms of volume but increased to 22.6 percent in terms of value. According to Abicalçados, the country's shoe industry association, Brazilian exports rose by 6.2 percent in terms of volume, but their value in U.S. dollars fell by 2.6 percent as average prices declined by 8.2 percent.

At Grendene, volumes fell by 10.7 percent to 27.7 million pairs in Brazil and by 5.4 percent to 9.1 million pairs in the rest of the world. The management felt that these drops were insignificant because of a high basis of comparison in the year-ago period.

The gross margin declined by 2.2 percentage points to 40.3 percent and operating profits fell by 30 percent to R$38.9 million (€12.70m-$17.03m). Grendene's labor costs rose by 11 percent in the first half of this year, partly due to a 6.8 percent increase in the minimum wage from last January.

Grendene still managed to raise net earnings by 9.4 percent to R$72.5 million (€24.0m-$32.2m) in the latest quarter, thanks to higher interest income, lower taxes and government subsidies related to exports and employment. The company generated cash of R$402.2 million (€131.30m-$176.09m) from operations in the first six months of the year, 7.6 percent more than in the corresponding 2013 period, and R$152.8 million (€49.88m-$66.90m) were used for dividend payments.

The company doesn't expect higher volumes for the full year, but there should be some growth in revenues and profits.