Dollar crisis bites Bashundhara Paper's profitability

Infographics: TBS

Despite experiencing a 4% growth in revenue, the net profit of Bashundhara Paper Mills, a concern of Bashundhara Group, has declined by 17% in the first half of the current fiscal year due to a dollar crisis that hampered the import of raw materials.

As a result, raw material imports decreased, and the company failed to operate its factory at full capacity.

Although its revenue increased to Tk685 crore from Tk656 crore compared to a year ago, net profit declined to Tk25.24 crore from Tk30.45 crore, according to its unaudited financials for the six months ending December.

Company Secretary M Mazedul Islam told The Business Standard, "Bashundhara Paper Mills faced difficulties in importing raw materials due to the dollar crunch for opening letters of credit, which disrupted production. Additionally, the high cost of the dollar increased overall costs."

He added, "As a result, although the revenue increased during the period, the profit has decreased. Essentially, the increased revenue came from the hike in product prices."

After a significant fall in revenue and profit in the fiscal 2019-20 owing to the Covid-19 pandemic, the company reported continuous growth in both in the last three fiscal years up to 2022-23.

However, as a market leader in the tissue industry and a major player in the paper sector, it experienced its highest revenue in its history in FY23, marking Tk1318 crore. Now, in the first two quarters of the fiscal 2023-24, it witnessed growth in revenue, but its profit fell in both quarters, according to its financial statements.

In the first quarter from July to September 2023, it made a profit of Tk16 crore, and in the second quarter from October to December of that year, its profit stood at Tk9 crore.