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GPH Ispat in the red for first time for foreign loan, currency shock

| Updated: December 27, 2022 09:09:52


GPH Ispat in the red for first time for foreign loan, currency shock

GPH Ispat Limited reported losses for the first quarter (Q1) ended in September 2022 for the first time since its listing on the bourses owing to costlier raw materials and exchange losses in foreign currency transactions.

The production cost soared by 44 per cent year-on-year to Tk 11.29 billion in the July-September quarter.

The company's loan burden also dragged down its profit, said company Secretary Abu Bakar Siddique.

GPH Ispat has a foreign loan of $907 million. Since the loan installments are paid in dollar, the finance cost shot up by 221 per cent year-on-year to Tk 1.75 billion in the quarter through September.

Also, a shortage of power supply disrupted the production, adding to the cost hike, said Mr Siddique.

The company is facing problems in opening letters of credit (LC) too due to the foreign reserve crisis, said Mr Siddique.

The quarterly revenue, however, grew 39 per cent year-on-year to Tk 12.82 billion in the period, thanks to increased production capacity following the completion of a new plant.

The company began commercial production early this year at its new plant, built using quantum technology, the first in Asia and the second in the world, at a cost of Tk 25 billion.

With the new plant, the annual production capacity of the company rose to 1050,000 tonnes of billet and 790,000 tonnes of rod and medium section products.

GPH Ispat's profit dropped 18 per cent year-on-year to Tk 1.49 billion in the FY22 but it declared 5.50 per cent cash and 5.50 per cent stock dividend. In the FY21, it paid 20 per cent cash and 10 per cent stock dividend.

Almost all the listed steelmakers, including the largest among those -- Bangladesh Steel Re-Rolling Mills, suffered losses in recent quarters due to the increase in the foreign currency conversion rate and a shortage of power supply.

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