SS Steel sees stellar profit growth on subsidiary income
Last year, SS Steel acquired 99% shares worth Tk160 crore of Saleh Steel
SS Steel Limited posted a 49% growth in profit in fiscal 2020-21 riding on the income from its subsidiary company, which the listed steel manufacturer had acquired a year ago.
At the end of the fiscal year, it reported a consolidated profit of Tk70 crore, which was Tk47 crore a year ago.
Last year, SS Steel acquired 99% shares worth Tk160 crore of Saleh Steel located in Chattogram.
Saleh Steel produces and sells rods and coils under its brand name and its annual production capacity is around 84,000 tonnes, says SS Steel.
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"We have achieved such growth as the steel market turned around from the tough time caused by the pandemic. Besides, our subsidiary company has helped post the growth," SS Steel Chairman Javed Opgenhaffen told The Business Standard.
"But if the raw material price hike continues, the steel market will remain volatile in the coming days," he added.
In a board meeting on 24 November, the company declared a 2% cash dividend for only general shareholders and an 8% stock dividend for all for FY21.
As per the audited financial report of FY21, its consolidated earnings per share stood at Tk2.31.
To approve the dividend, the company will hold an annual general meeting on 31 December and the record date has been set for 15 December.
The board has also decided to spend Tk20 crore on the purchase of land and capital machinery for its business expansion.
Despite the expansion plan and dividend news, its share price fell 4.44% to close at Tk21.50 each on Thursday at the Dhaka Stock Exchange (DSE).
In January this year, SS Steel decided to acquire a 75% share of Southeast Union Ceramics Industry Limited, a coal-based China-Bangladesh joint venture ceramic manufacturing company, at a cost of Tk200 crore.
The shareholders of the steel company have also approved the acquisition proposal in an extraordinary general meeting.
The company also signed an agreement with the City Bank to arrange financing of Tk200 crore as a term loan and Tk100 crore as working capital from a consortium of banks and non-banking financial institutions for acquiring the ceramic plant.
The chairman of the company said, "We are working on it. After the completion of the acquisition, we will disclose it as price-sensitive information."
