GPH Ispat posts Tk16.46cr loss in Jul-Sep

Infographic: TBS

GPH Ispat Limited, a leading steel manufacturer in the country, reported a loss of Tk16.46 crore in the July-September quarter attributed to the adverse impact of foreign currency fluctuations.

The loss per share is reported at Tk0.36, as indicated in a price-sensitive statement filed by the company with the Dhaka Stock Exchange (DSE). 

The first quarter of the current fiscal year saw a negative profit figure, due to a decline in sales and the adverse impact of foreign currency fluctuations, the statement adds.

According to unaudited financials, gross revenue declined by 16% to Tk1,100 crore compared to the same quarter in the previous fiscal year. 

GPH Ispat faces a substantial loan burden, primarily acquired for the establishment of a billet plant and MS Rod plant in Chattogram. 

As of the end of September this year, its long-term loan amounted to Tk2,280 crore, equivalent to 93% of shareholders' equity.

The new plants have an annual production capacity of 8.40 lakh tonnes of billet and 6.40 lakh tonnes of MS Rod, contributing significantly to increased revenue. This enhanced capacity positions the company to meet its loan obligations in a timely manner.

Earlier, GPH Ispat recommended a 5% cash dividend for its general shareholders and a 5% stock dividend for all shareholders for fiscal 2022-23. 

The decision to declare a lower dividend than the previous year is attributed to a sharp fall in profit, primarily due to high inflation in raw material costs. Additionally, foreign currency fluctuations are exerting pressure on the company's profitability.

In the last fiscal year, GPH Ispat experienced a significant drop in net profit, plummeting over 81% to Tk26.76 crore compared to the previous year. Consequently, its shares have remained at the floor price of Tk44.80 each since November last year at the Dhaka bourse.