Bangladesh Steel Re-Rolling Mills (BSRM) has secured a record profit in FY25 in a challenging business environment, driven by higher sales and lower input costs.
It earned a consolidated profit of Tk 6.14 billion in the year, a 42 per cent year-on-year increase from the year before, according to a stock exchange filing on Sunday.
Buoyed by the record profit, the company has declared a 50 per cent cash dividend for the year, up from the 35 per cent cash dividend paid in the previous year.
"The improvement in profitability can be attributed to higher sales, lower input costs coupled with effective cost management strategies," said Shekhar Ranjan Kar, head of finance & accounts of BSRM Group.
Revenue jumped almost 16 per cent year-on-year to Tk 96.64 billion in FY25.
"Our market share remained more than 30 per cent due to increased demand for quality products," said Mr Kar, who is also company secretary, adding that an expansion of production capacity helped sales grow.
Profit from associate companies also contributed to the significant profit growth.
BSRM Steels, an associate company of Bangladesh Steel Re-Rolling Mills, launched its new plant at the Mirsarai economic zone in February this year with an annual production capacity of 0.6 million tonnes of MS (mild steel) rods.
The country's largest steel manufacturer built the new re-rolling mill at a cost of around $217 million to raise its market share. The Japan International Cooperation Agency (JICA) and the Infrastructure Development Company Ltd (IDCOL) are major financiers of the infrastructure.
The new plant boosted production capacity, ensuring a robust supply of high-quality steel to meet the growing demand in infrastructure projects and in the housing sector across the country, said Mr Kar.
"Operational efficiency measures also helped the company maintain profit growth, showcasing BSRM's ability to adapt to a challenging business environment."
The demand for steel is projected to rise steadily over the next five years, with the company well-positioned to capitalize on this growth through capacity expansion and diversification strategies, the company said in its earnings note.
Since scrap steel is the main input material, any price shift in the global scrap market significantly impacts BSRM's cost structure.
"Our strategic sourcing and cost-management initiatives have helped us navigate these fluctuations and maintain steady production to support Bangladesh's ongoing infrastructure projects," said the company.
The company also reduced additional commissions, which has brought down selling and distribution expenses in FY25 compared to the previous year.
These efforts, the company claims, have contributed to achieving a strong financial position, reflected in the increase in net asset value per share from Tk 150.06 in FY24 to Tk 166.79 in FY25.
The company has scheduled its annual general meeting (AGM) for December 24 to approve both the dividend payout and the audited financial statements. The record date has been set for November 10.
Following the disclosure, the stock of the company rose almost 4 per cent to Tk 87.2 per share on Sunday on the Dhaka Stock Exchange while the overall market suffered a decline.
BSRM to invest in wire business
The board of BSRM has also approved an investment of Tk 2 billion in BSRM Wires Ltd through a subscription to its shares.
"This strategic investment aims to enhance shareholder value by diversifying the group's portfolio into the production of high-quality wire products," said the company in a stock exchange filing on Sunday.
The new facility will focus on producing a range of high-quality wire products, including Low Relaxation Prestressed Concrete (LRPC) wires, welding electrodes, ACSR core wires and chain-link fences, among others.
As part of its expansion strategy, the board has also proposed setting up a large wire rod pickling station to enhance production capacity in the wire segment and a state-of-the-art fastener and bolt-and-nut manufacturing plant at the Mirsarai economic zone.
"The initiative will not only enhance shareholder value but also contribute to the country's growing demand for industrial fasteners and specialised wire products," said Mr Kar.
The company will finance the project from its own funds, he added.
BSRM Steels' performance also shows promise
BSRM Steels, a concern of Bangladesh Steel Re-Rolling Mills, also reported a 36 per cent year-on-year growth in profit to Tk 5.17 billion in FY25 while sales revenue jumped 25 per cent.
Riding on higher profit, the board declared a 50 per cent cash dividend for the year, up from the 32 per cent cash dividend paid the year before.
Following the news, the stock of BSRM Steels went up 8.7 per cent to Tk 70 per share on Sunday on the Dhaka bourse.
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