GPH Ispat profit plunges 64% in Q1 on surging costs, interest rates

GPH Ispat, one of the country's major steel manufacturers, has reported a 64% year-on-year decline in profit for the first quarter of the 2025-26 fiscal year due to rising production and operating costs, along with higher bank interest rates.

In the September quarter, the earnings per share (EPS) of GPH Ispat declined to Tk0.05, which was Tk0.14 in Q1 of FY25, according to a disclosure published on the stock exchanges today (11 December).

Regarding the declines in its profit, GPH Ispat in the disclosure said that its EPS declined in the September quarter due to higher production costs, increased other operating expenses and higher bank interest rates, which collectively compressed profit margins.

Previously, GPH Ispat reported its first-ever annual loss since debuting on the stock exchanges in 2012, marking a significant setback for the Chattogram-based steelmaker as rising production costs and spiralling finance expenses eroded its profitability in FY25.

The company incurred a loss of Tk24.68 crore in the fiscal year ended in June 2025, a sharp reversal that came just a year after GPH posted a profit of Tk85.77 crore in FY24.

The loss translated into a negative earnings per share of Tk0.51, reflecting the pressure from higher costs across its operations.

The company said its bottom line was hit primarily by surging raw material prices, increased production costs, and a substantial spike in finance expenses.

Elevated global scrap prices and higher freight rates pushed up the cost of goods sold, while a rising interest-rate environment increased the burden of borrowing for a firm that relies heavily on loans to fund its operations and expansion projects, it added.

GPH recommended a 5% cash dividend only for general shareholders for FY25 – its lowest payout since listing. The company paid a 10% cash dividend the previous year, and its highest-ever payout was 20% for FY21.