BSC maintains steady growth in net profit

The Bangladesh Shipping Corporation has maintained steady growth in net profit throughout last five fiscal years, thanks to the addition of new vessels to its fleet and up-gradation of marine workshop.

Now, the state-owned autonomous company is planning to buy 16 more vessels to meet growing demands from various government projects, regional trades and Eastern Refinery Ltd, a government oil refinery.

The company, which trades under ‘A’ category in both the stock exchanges of the country, recorded the biggest jump in profit – Tk 23.95 crore - in 2019-20 fiscal year as it had added six new vessels to its fleet the previous year.

While responding to a query by The Business Post, Khalid Mahmud Chowdhury, state minister for shipping and chairman of the BSC, attributed the success to the modernisation and up-gradation of the corporation.

The government modernised the corporation and strengthened it. Six new vessels, which were imported from China, joined the BSC fleet recently and as a result, the corporation’s profits are increasing gradually, he said.

The state minister also revealed that discussions were underway with Denmark and China to bring in more vessels and make the state-owned company stronger.

Mentioning that Father of the Nation Bangabandhu Sheikh Mujibur Rahman established the national flag carrier corporation, he said the government is now giving its full efforts to make BSC even stronger.

The BSC provides shipping services to local exporters, importers, and business houses. The main source of earning of BSC is chartered tankers. Currently, it has eight operational vessels.

The 49-year-old company posted a net profit of Tk 57.48 crore after taxes in the first nine months of FY21, while the figure was Tk 41.47 crore in the previous year.

The publicly traded company reported earnings per share (EPS) of Tk 3.77 for the third quarter on of FY21, which was Tk 0.91 at the same period last year.

The corporation’s net profit was Tk 8.66 crore in FY17. Later, it rose to Tk 12.51 crore in FY18, Tk 17.51 crore in FY19 and Tk 41.46 crore in FY20.

Its EPS was Tk 2.72 in FY20, Tk 1.15 in FY9, Tk 0.82 in FY18, and Tk 0.57 in FY17.

EBL Securities Limited, in its equity report on the company said that revenue contribution from time charter had increased to 76.6 per cent, while the year-on-year growth in revenue was 107.12 per cent.

The company’s freight revenue is expected to increase by multiple folds once it materialises its plan to add 16 more vessels, it said.

Currently, the BSC repairs vessels in a more speedily manner and does not require employing foreign companies as much, thanks to the up-gradation of its marine workshop. As a result, the company’s repair cost reduced and service revenue increased, the report said.

The report also said that the BSC will get priority as a national flag carrier to transport goods as per government law.

According to the Bangladesh Flag Vessel Protection act-2019, at least 50 per cent of seaborne cargo relating to Bangladesh’s international trade will have to be transported by vessels carrying the Bangladeshi flag.

The BSC is planning to purchase two 80,000 tonnage mother bulk carriers to transport coal. To lighterage from the mother vessels, two more bulk carriers will also be bought with capacity ranging from 10,000-15,000 tonnage.

As the LNG import of Bangladesh government is rising, the BSC has already planned to purchase two 140,000 cm (cubic meter), two 174,000 cm and two 180,000 cm capacity LNG vessels.

The company’s net asset value (NAV) per share was Tk 58.38 as on March 31, 2021. It reported net operating cash flow per share (NOCFPS) of Tk 9.58 for July 2020-March 2021 period as against Tk 5.63 for July 2019-March 2020.

The shipping corporation was established on February 5, 1972. It is run through a board of directors with Minister for Shipping as its Chairman and involvement of other senior officials of shipping and finance ministries.

It has been carrying out share trading since 1977. Its shares closed at Tk 47.80 on Thursday.

The company’s paid-up capital is Tk 152 crore and authorised capital is Tk 1,000 crore, while the total number of securities is 15.25 crore. Its price-earnings ratio (P/E) is 15.9.

As of July 31, the government was holding 52.10 per cent of the company’s total shares, while institutions 24.30 per cent and general shareholders 23.60 per cent, according to information at the Dhaka Stock Exchange (DSE).