Strong dollar throws GPH Ispat into losses in Sept quarter

Despite posting a decent growth in its revenue, GPH Ispat Limited has incurred a massive loss in the first (July to September) quarter of the ongoing fiscal year.

Along with expensive raw materials, and power crisis that disrupted production, the steel manufacturer also blamed the losses from foreign exchange transactions due to a strong dollar against the taka.

A foreign exchange gain or loss occurs when a company buys and/or sells goods and services in a foreign currency, and that currency fluctuates relative to the firm's home currency.

During the quarter, the company's losses stood at Tk78.92 crore, from a profit of Tk45.47 crore in the same quarter previous year. Its loss per share stood at Tk1.82 and net asset value per share at Tk26.98.

In the first quarter of the 2022-23 fiscal year, its revenue increased by 36% to Tk1,282.16 crore, which was Tk943.23 crore a year ago.

Back in the 2020-21 fiscal year, GPH Ispat posted a record 454% growth in profits, thanks to its launching of new products, capacity expansion, and ramping up exports to China even amid the pandemic.

But the company could not maintain this growth trend the next fiscal and saw an 18% profit decline in the 2021-22 fiscal year.

Owing to lower profits, the company recommended only 5.5% cash and 5.5% stock dividends for FY22, which was 20% cash and 10% stock dividends in the previous fiscal.

GPH Ispat manufactures and trades MS Billets and MS Rods.

It was incorporated in 2006 and was listed on the stock exchanges in 2012.

Till November 2022, sponsors and directors held 49.61%, institutional investors 17.90%, and general investors 32.49% shares in the company.

The last trading price of each share of the company was Tk44.80 on the Dhaka Stock Exchange on Thursday.