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SS Steel wobbles as import cost eats up profits in H1

Staff Correspondent
07 Mar 2023 00:00:00 | Update: 07 Mar 2023 00:05:50
SS Steel wobbles as import cost eats up profits in H1

Steel maker SS Steel Limited witnessed a 98.54 per cent plunge in net profit in the July-December period of the fiscal year 2022-23.

The publicly traded company braced for the hardship, as the import costs jumped many times due mainly to the steep devaluation of the domestic currency against the US dollar, wiping out its earnings.

The steel maker’s net profit fell to Tk 65.7 lakh in the first half of FY23 from Tk 45 crore in the same period last fiscal, as per a filing posted on the Dhaka Stock Exchange (DSE) website on Monday.

The firm’s consolidated earnings per share (EPS), as per its latest financial report, dropped to Tk 0.02 for July-December of FY23 from Tk 1.37 for the same period last fiscal.

Moreover, its EPS for the October-December quarter of the current fiscal year fell to Tk 0.023, which was Tk 0.69 for the same period of FY22.

Md Mostafizur Rahman, company secretary of SS Steel Limited, said they had faced a very tough time in the first six months of the current fiscal, as raw materials prices spiked manifold owing to an unprecedented depreciation of the local currency against the US dollar.

Alongside the earnings decline, the steel maker also reported a significant deviation in its net operating cash flow per share (NOCFPS) in the July-December period of the current fiscal.

The company’s NOCFPS stood at negative Tk 8.13 for July-December of 2022 against Tk 0.79 for the same period last year.

This deviation is attributed to significant changes in working capital, with the company making more payments than it receives in cash.

The company’s consolidated net asset value (NAV) per share with revaluation was Tk 24.09 as on December 2022, slightly higher than Tk 24.05 till June 2022.

Meanwhile, the consolidated NAV per share without revaluation was Tk 21.48 as on December 2022, slightly up from Tk 21.41 as on June 2022.

Furthermore, the steel producer also released its unaudited first quarterly (July-September) financial report for the fiscal year 2022-23 on the same day.

Its consolidated EPS for the July-September quarter stood at Tk 0.01, much lower than Tk 0.73 for the same period last fiscal.

SS Steel is one of the country’s leading steel makers, with a wide array of operations such as billet production, re-rolling process, cooling, and stocking of finished re-bar.

SS Steel shares remained unchanged at Tk 16.6 per share on the DSE trading floor on Monday.