Global Heavy Chemicals suffers as gas crisis hits production

Global Heavy Chemicals Limited, a publicly traded company, posted a net loss of Tk 3.31 crore in the first quarter (July-September) of the current fiscal year (2022–23) as supply shortage of gas and exorbitant import costs of raw materials hit its production extremely.

The industrial chemicals manufacturer had also incurred a loss of Tk 1.51 crore in Q1 of the last fiscal year but the losses intensified this year mainly due to the production disruption.

The concern of Opsonin Group recorded a per-share loss of Tk 0.46 in the July-September period of the current fiscal against a per-share loss of Tk 0.21 in the first quarter of the fiscal year 2021–22.

Its net asset value (NAV) per share stood at Tk 53.22 till September 2022 which was Tk 53.68 as on June same year.

Talking to The Business Post, Company Secretary Khondoker Ahaduzzaman said, “It is true that the increase in gas prices lowered our income, but the biggest problem was the supply shortage of gas that hampered our production on a large scale.”

“We could generate profit amid all odds if the gas supply had remained uninterrupted, but our production came nearly to a halt due to the supply shortage of industrial gas, pushing us to the verge,” he added.

“The stronger dollar appeared a blow to all importers because production costs grew by 30 to 40 per cent due to the devaluation of the taka against the dollar since the breakout of the Russia-Ukraine war.”

The company reported losses for the first time in FY22 in the last five years.

The chemical manufacturer logged a net loss of Tk 11 crore in FY22 against a net profit of Tk 2.48 crore in the previous fiscal.

The company blamed the gas supply shortage and inflated production cost behind the fall in its earnings, while its failure to recover operating fixed costs including depreciation, labour cost, and finance costs also intensified its hardships.

The company recommended a 2 per cent cash dividend to its shareholders for the fiscal year 2021–22.

It had paid 5 per cent cash dividends in the previous two fiscal years each.

Before that, it paid a 10 per cent cash dividend to its general shareholders only in FY18.

The company’s annual general meeting (AGM) is slated to be held on December 31 next. The record date has been fixed as 18 December for the share splits.

Incorporated in 2000, Global Heavy Chemicals Limited got listed on the stock exchanges in 2013.

GHCL is the first private-sector chlor-alkali producer in Bangladesh, and it exports chlorine to India for a long time, according to company sources.

It produces import substitutes for industrial chemicals like caustic soda, hydrochloric acid, bleaching powder, chlorine, sodium hypochlorite, and chlorinated paraffin wax (CPW).

Sponsors and directors jointly own a 68.6 percent stake in the company, while institutional investors hold 18.68 percent, and general investors represent 12.72 percent.

The company said their sales had increased in the recently past quarter but the soaring gas bill expenses and raw material import costs ate up their earnings, leading to a fall in EPS.

Meanwhile, its NOCFPS increased year-on-year in the July-September period of the current fiscal due to the same reasons, it stated.