Shipping Corp aims to buy one ship per year with own funds till 2030, driven by record profits

Highlights:

• BSC plans one new ship per year until 2030
• FY25 profit hits record Tk306.56 crore, revenue Tk798.28 crore
• Growth driven by higher freight rates, ship sales gains
• BSC now owns six ships; fleet expanding via own funds
• Operational efficiency and continuous ship usage boost profitability
• Profit surged 1,688% since FY19 due to multiple factors

Seeing growth opportunities in the global shipping industry, Bangladesh Shipping Corporation (BSC), the state-owned ocean-going vessel operator, has decided to expand its fleet by acquiring one new ship per year until 2030 using its own funds, supported by record profits and a strengthened financial base.

"We discussed the plan [to buy one vessel per year with its own funds] in the board of directors' meeting held on Wednesday. By 2030, another five new ships will join the fleet," said Commodore Mahmudul Malek, managing director of BSC.

The board, in its meeting, approved the annual financials and dividend for the 2024-25 fiscal year.

Financials revealed that the corporation set a new record in its 53-year history, posting all-time high revenue and profit since its inception in 1972, with a profit of Tk306.56 crore – up 23% year-on-year – and revenue of Tk798.28 crore, up 33.39%.

Despite significant profit growth, the corporation recommended a 25% cash dividend for shareholders, unchanged from last fiscal year.

The corporation said the growth in its business and profitability was driven by higher freight rates in the international shipping industry and capital gains from the sale of its two fire-damaged oil tankers.

Although the BSC had previously bought ships with government funding, last year it planned to acquire two vessels using its own funds of Tk934 crore for the first time in its history.

Of the two ships, one ship, Banglar Pragati, has already joined the fleet and started commercial operations on 26 October, earning Tk5.72 crore by 4 November, according to BSC sources.

The other ship, Banglar Nobojatra, is expected to join the fleet by December.

Infograph: TBS

Historically, the corporation acquired a total of 44 ships; now it has only six in its fleet, with the October addition of Banglar Pragati. Of the six ships, five were acquired in 2018 and 2019 from China under government-to-government contracts for Tk1,500 crore.

Commodore Mahmudul Malek said the demand for ships in the shipping sector is increasing day by day. To capitalise on this opportunity, the corporation has planned to acquire more vessels using its own funds, as continuous business growth has strengthened its financial base. 

Regarding the growth in the corporation's revenue and profit, he said that it has primarily been driven by improved operational efficiency and higher chartering fees in the shipping sector. Although ships were often idle in the past, over the past year, not a single day has gone by without ships being in operation. 

The addition of new ships is expected to further boost revenue and profitability, he hoped.

Profit surges 1,688% in 7 years

According to its financial report, the Shipping Corporation's profit for the fiscal year 2018-19 was only Tk17 crore.

In seven years, the profit has surged by nearly 1,688%, reaching Tk306 crore in FY25.

The profit increased to Tk72 crore in FY21 but saw a significant jump in FY22, surging by 212% to Tk225 crore.

BSC officials previously attributed this remarkable profit growth to four main factors: an increase in shipping rates for the transportation of goods, the implementation of the Bangladesh Flag Vessels (Protection) (Amendment) Act, higher interest rates on fixed deposit receipts, and the appreciation of the dollar.

An official who has long served in the corporation's finance department told TBS that since the onset of the Russia-Ukraine war in February 2022, the state entity's revenue and profits have been consistently rising.

The war has led to increased freight rates on international routes, benefiting the corporation significantly.

Moreover, all government institutions enforcing the flag vessel act, particularly the Bangladesh Petroleum Corporation and Bangladesh Chemical Industries Corporation, are now importing products through the Shipping Corporation.