Shipping Corporation posts 8pc profit growth in Q2 on higher freight rates

The Bangladesh Shipping Corporation (BSC) posted an 8 per cent year-on-year growth in profit to Tk 578 million in the October-December quarter last year, driven mainly by higher revenue earnings.
The revenue increase during the quarter, compared to the same period a year earlier, resulted from a surge in freight charges on both local and international routes, the company said in its earnings notes.
"We have earned higher revenue due to the increased freight charges on the international routes," said Commodore Mahmudul Malek, managing director of the BSC, while speaking to The Financial Express over the phone.
He added that a reduction in costs through cost-effective measures taken by the current management also contributed to the profit growth.
During the quarter ended December last year, the Corporation's revenue rose slightly by 1 per cent year-on-year to Tk 1.47 billion, while operating expenses declined by more than 4 per cent to Tk 716 million.
Other favourable factors supporting the company's business growth included the Bangladesh Flag Vessels (Protection) (Amendment) Act, appreciation of the US dollar, and higher interest income from fixed deposits.
The act mandates government entities, such as the Bangladesh Petroleum Corporation and the Bangladesh Chemical Industries Corporation, to prioritise the Shipping Corporation while importing goods. The exclusive right to carry government cargoes under the flag vessel act further supported business growth in a favourable operating environment.
Following the outbreak of the Russia-Ukraine war, freight rates on international routes increased alongside the appreciation of the US dollar, benefiting the state-run oceangoing vessel carrier, as it realises freight earnings in dollars.
The Corporation earns revenue mainly from two segments-freight revenue and service revenue-and also generates interest income from fixed deposit receipts (FDRs) held with banks.
However, its half-yearly profit declined by 5 per cent year-on-year to Tk 1.36 billion due to lower revenue.
The net operating cash flow per share (NOCFPS) dropped to Tk 11.85 for the six months through December last year, compared to Tk 20.10 in the same period a year earlier, mainly due to higher payments to suppliers.
Meanwhile, the net asset value rose to Tk 111.27 as of December last year from Tk 104.84 in June last year, driven by an increase in retained earnings.
The Shipping Corporation maintained steady annual profit growth over the past few years up to FY25, recording its highest-ever profit of Tk 3.06 billion in FY25 in its 53-year history.
Despite the record profit, the Corporation declared a 25 per cent cash dividend for FY25, unchanged from the previous year.
The dividend payout remained the same as the Corporation plans to purchase ships using its own funds, BSC Managing Director Malek said at the company's latest annual general meeting (AGM).
The Shipping Corporation began its journey with only two ships in 1972 and was listed on the stock market in 1977.
In 2018, six new ships-three oil tankers and three bulk carriers-were purchased, raising the fleet size to eight oceangoing vessels.
However, one of its vessels, Banglar Samriddhi, was damaged in a bomb attack at a Ukrainian port in 2022 during the Russia-Ukraine war. The Corporation received an insurance claim worth $22.48 million in March 2023.
Later, two oil tankers-Banglar Jyoti and Banglar Sourav-were severely damaged in separate fire incidents in September and October 2024. The BSC subsequently sold the vessels for Tk 460 million.
Meanwhile, the Corporation received a newly acquired vessel, MV Banglar Progoti, in October last year, which has already joined the fleet.
At present, the BSC owns six vessels, including bulk carriers as well as chemical and oil tankers, transporting goods on various routes, while new procurement remains necessary.
The Shipping Corporation received another new vessel-MV Banglar Nobojatra-in January this year. The vessel was purchased using the Corporation's own funds and will soon join the fleet.
The company has also announced a plan to purchase six modern container ships from South Korea at a cost of $330.32 million to break the stranglehold enjoyed by non-Bangladeshi feeder vessels.
The acquisition is part of the government's plan to expand the scope of maritime trade and strengthen Bangladesh's position in the global shipping market.
If everything goes as planned, the vessels are expected to be added to BSC's fleet by 2027. The new ships will expand the fleet and help the company become a self-reliant and internationally competitive shipping operator, the BSC managing director said at the latest AGM.

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