Rising costs push GPH Ispat into first annual loss since listing

GPH Ispat, one of the country's major steel manufacturers, has 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 June 2025, according to a price-sensitive statement filed with the Dhaka Stock Exchange (DSE) today (2 December). 

This sharp reversal comes 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 noted that a combination of these factors ultimately wiped out its profitability for the year.

Its net asset value per share dropped marginally as well, falling 1.35% year-on-year to Tk51.72 at the end of FY25. 

The company has yet to publish its detailed annual financial statements, but unaudited quarterly reports up to March 2025 showed GPH carrying Tk3,160 crore in long-term loans and another Tk3,182 crore in short-term borrowings – one of the highest leverage levels in the steel sector.

While GPH struggled, competitors strengthened their foothold in the market during the same fiscal year. 

BSRM Steels Limited posted a 25% jump in revenue to Tk10,366 crore and a 36% rise in net profit to Tk517 crore in FY25. Bangladesh Steel Re-Rolling Mills Limited (BSRM) also delivered strong results, with revenue rising 16% to Tk9,572 crore and profits soaring 42% to Tk614 crore. 

Both competitors announced a 50% cash dividend for their shareholders, underscoring their financial strength during a challenging year for the broader industry.

GPH, in contrast, has declared 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. 

The record date has been set for 23 December, with the annual general meeting scheduled for 31 December.

The company's capital-raising efforts also faced barriers throughout the year. In October 2024, GPH sought to issue preference shares to raise Tk500 crore to repay its high-cost debt, but the Bangladesh Securities and Exchange Commission rejected the application. 

The regulator had previously declined the company's plan to raise Tk242 crore through a rights share offering aimed at expanding production capacity. 

In February, GPH announced its intention to raise $150 million through an initial public offering on the Hong Kong Stock Exchange to finance a new expansion project.

Despite the loss and setbacks, investor reaction remained relatively calm. GPH Ispat's shares inched up 0.59% on Tuesday to close at Tk17.10, giving the company a market capitalisation of Tk827 crore.