BBS Cables suffers losses in Jul-Sep quarter

BBS Cables – the second-largest cable manufacturer in the country – incurred a significant loss in the first quarter of the current fiscal year, primarily attributed to the increased cost of goods sold resulting from the devaluation of the taka against foreign currencies.

In the July-September quarter, the company's revenue decreased by 31%, amounting to Tk106.10 crore compared to Tk154.03 crore in the same period of the last fiscal year.

During this quarter, the cable manufacturer recorded a loss after tax of Tk6.67 crore, in contrast to a profit of Tk2.93 crore a year ago. The per-share loss stood at Tk0.32, a notable shift from the Tk0.15 positive figure reported in the same period of the previous year.

In the first quarter, the net cash flow per share also decreased to Tk0.62 from Tk1.01 a year ago.

Speaking on condition of anonymity, an official of the company mentioned that the price of raw materials increased, and concurrently, the exchange rate remained exceptionally high during the period.

Additionally, banks did not permit sufficient opening of letters of credit (LC) due to the dollar crisis. Consequently, the company couldn't accept buy orders, as it would be unable to supply products owing to a shortage of raw materials.

The official emphasised that the company faced challenges in adjusting its product prices to match the rise in the cost of goods sold, especially in a highly competitive market.

Furthermore, he noted that in the first quarter, the company did not receive any government orders, which significantly impacted the company's revenue.

BBS Cables has recommended a 2% cash dividend for its shareholders for the fiscal year 2022-23. The approval of dividends and the audited financial report are scheduled to take place during the annual general meeting on 23 November.

The company reported restated earnings per share of Tk0.46, a notable decline from Tk3.81 at the end of fiscal year 2022-23. The restated net asset value per share stood at Tk32.68 as of the end of September 2023.

Incorporated in 2009, BBS Cables commenced its commercial operations in 2011 and was listed on the bourses in 2017. The company successfully raised Tk20 crore through an initial public offering (IPO) to facilitate business expansion. Its primary activities involve the manufacturing and distribution of various cable types.

As of Thursday, the last trading share price of the company at the Dhaka Stock Exchange was Tk49.90 per share.

As of 31 October 2023, sponsors and directors collectively held 30.98% of the company shares, institutions held 21.02%, foreign investors held 0.46%, and general investors held 47.54%