State-run Bangladesh Shipping Corporation (BSC) encountered a sudden selling pressure on the bourses after two back-to-back fire incidents had destroyed two ships in its fleet.
The vessels were bringing in 20 per cent of the revenue by transporting crude oil from mother vessels to the Eastern Refinery. But they were more than three-decade old and involved high maintenance costs. Moreover, an arrangement has already been made to transport fuel from onshore vessels by pipeline to the refinery.
Hence, Commodore Mahmudul Malek, managing director of BSC, said revenue loss would be very short-term. In the long run, the ships would have been disposed of anyway for being beyond repair.
Panic selling erodes stock price
On September 30, 36-year-old oil tanker Banglar Jyoti suffered severe damages in a blaze. That triggered panic selling of shares of the stock on October 2. Around 1 million shares were traded in on the day.
Within a week on October 5, another fire incident ravaged oil tanker Banglar Shourabh. That set in another share selling spree on October 7, dragging the stock to Tk 69.40 per share on the Dhaka Stock Exchange (DSE).
The stock fell about 20 per cent in the span of a week since September 29. On Wednesday, the stock recovered a bit, rising to Tk 71.40 per share.
The authorities suspect that the two fire incidents in a row at the Chattogram port were acts of sabotage to weaken the country's energy security.
According to the company's FY23 financial statement, it used to earn about 20 per cent of its revenue by providing services using the ships. The vessels were assigned the task of carrying crude oil only.
"We anticipate insignificant impacts. We have rented a foreign oil tanker to provide the same services," said Mr Malek.
He also said the ships should have been scrapped as their maintenance cost was high.
Though the loss of the ships would not translate into major revenue loss, Mr Malek said the ships had been used for training of new crew members and that the oil tankers were assets of the company.
The crude oil transportation services will not be required in a few months as Bangladesh's maiden single-point mooring (SPM) system will begin operations shortly. The facility will directly transfer petroleum from offshore vessels to onshore storage tanks, reducing time and cost of oil import.
Meanwhile, for the first nine months of FY24, the Shipping Corporation reported a profit of Tk 1.68 billion, 11.60 per cent lower than in the corresponding period last year.
Currently the price-to-earnings ratio, according to unaudited financial reports, is 4.85.
The P/E ratio, which measures stock price relative to earnings per share (EPS), is low compared to overall DSE's P/E of 15.
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