The Bangladesh Shipping Corporation (BSC) witnessed the lowest profit in eight quarters in July-September this year, thanks to a decline in vessel fare internationally coupled with lower export-import due to the persisting dollar crisis.
When compared to the same quarter of the previous fiscal year, the state-run oceangoing vessel management authority's profit fell 17 per cent to Tk 503 million in the Q1 of FY24.
The earnings per share went down to Tk 3.30 for the quarter from Tk 3.98 a year ago, according to a stock exchange filing on Monday.
Freight charges have dropped 50-70 per cent globally from the recent peak, according to the Shipping Agents' Association. The shrinking demand for goods as well as the shortage of the greenback hampered the business further.
The earnings disclosure led to a 0.37 per cent drop in the stock price to Tk 107.50 per share on Monday, while the Dhaka Stock Exchange itself ended higher.
Commodore Md Ziaul Hoque, managing director of the company, said revenue earnings from major segments had decreased mainly due to a sharp fall in vessel fare on international routes.
"A fall in global shipping fares and vessel maintenance slowed down the profit growth in the first quarter." Otherwise, earnings would have been much higher, Mr Hoque said.
During the quarter, two ships were taken to rest on a dry platform for maintenance, a procedure called dry-dock, which is carried out in every five years, he said.
Moreover, rising interest on loans that the Corporation had taken to purchase ships drove up finance costs.
The Shipping Corporation, however, maintained a steady annual growth in profit for the three financial years to FY23, with a record profit of Tk 2.46 billion in FY23.
Based on the profit, it declared 25 per cent cash dividend for FY23, the highest in its history.
The state-owned autonomous corporation owns eight ships and oil tankers and sea-going vessels to carry export items, such as garments, and imported products, such as grain and crude oil. It also offers ship repair services.
Aiming to enhance its transportation capacity, the Corporation has taken measures to add as many as 21 more ships to its fleet with foreign loan assistance.
The purchase of these ships is part of the government's plan to make the BSC a self-dependent shipping firm.
Of the 21 new vessels, four would be of bigger sizes -- two mother bulk carriers and two crude oil mother tankers. These are meant to ensure an uninterrupted supply of crude oil and coal, as several power projects are nearing completion, including coal-based power plants in Rampal, Payra and Matrabari.
Two 114,000-tonne crude oil mother tankers and two 80,000-tonne mother bulk carriers will cost around Tk 25 billion.
The BSC managing director said the Corporation had recently signed a contract with a Chinese supplier, China National Machinery Import and Export Corporation that would build the ships.
He expressed the hope that the construction of the four ships would begin within a couple of months and be completed in 20 months.
The BSC started its journey with only two ships in 1972 and got listed in the stock market in 1977. It owned only two ships until 2018 before the inclusion of six vessels to its fleet. Three ships were added in 2018, and the rest in 2019.
One of its vessels -- Banglar Samriddhi -- came under attack in the Russia-Ukraine war last year. The BSC received an insurance claim worth $22.48 million in March this year.
Meanwhile, the shipping ministry issued the Bangladesh Flag Vessel (protection of interests) rule in February this year, incorporating a provision that the Shipping Corporation will handle waterway shipment of all state imports of fertilizer, crude oil, food items, and motor vehicles.
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