GPH Ispat turns a loss due to power shortage, dollar crisis

Despite a significant growth in its net revenue, GPH Ispat Limited, one of the leading steel manufacturers of the country, turned a loss in the first half of the current fiscal year due to a power shortage and foreign currency fluctuations.

The steel manufacturer incurred a loss of Tk84.99 crore compared to a profit of Tk94.93 crore in the same period of the previous fiscal year.

It said a significant increase in dollar rates as well as the shortage of power supply, which has disrupted production, have adversely affected its costs of production.

According to its half-yearly unaudited financials, net revenue grew by 42% to Tk2,756.14 crore from Tk1,944.06 crore in the July-December period of FY22.

And during the July-December period, its cost of goods sold increased by 47.51% to Tk2448.19 crore.

In the October-December quarter of FY23, its net revenue increased by 44% to Tk1473.98 crore while cost of goods sold increased by 50% over the same period of the previous fiscal year.

And finally, it incurred a loss of Tk5.10 crore compared to a profit of Tk50.41 crore in the October-December quarter of FY22.

Its shares are stuck at Tk44.80 each on the floor price.

GPH Ispat got listed on the stock market in 2012.

Thanks to the launching of new products, capacity expansion, and ramping up exports to China even amid the pandemic, GPH Ispat posted a record 454% growth in profits to Tk166.09 crore in the fiscal 2020-21.  

Just one year later, in fiscal 2021-22, its profit declined to Tk149.42 crore, a 10% decline from the previous fiscal year, due to significant losses in foreign currency transactions, rising prices of all imported raw materials, international shipping, and freight charges due to dull economic conditions after the effect of Covid-19 and the Russia-Ukraine war, said the company.

That is, it paid a 5.5% cash and 5.5% stock dividend to its shareholders for FY22, compared to 20% cash and 10% stock dividends in FY21.