BSRM in Tk10,000 crore sales club

Bangladesh Steel Re-Rolling Mills (BSRM) Limited has joined the group of listed companies having annual revenues over Tk10,000 crore, thanks to the government's mega projects – completed and ongoing.

The leading steelmaker is the fourth among 392 listed firms to join the list of four with Titas Gas, Grameenphone and British American Tobacco Bangladesh Company Limited (BATBC).

According to the company's financial statement, in the fiscal year 2022-23, the BSRM earned Tk11,506 crore in revenue, which was 44% higher than the previous fiscal year, despite the ongoing tough times, such as unavailability of foreign currency, gas price hike and supply disruption and the raw material cost hike.

"We have got a big income from the mega projects of the government in the past years. But since last year, government projects are going slow. However, private sector demand has increased which has helped us grow our business," Aameir Alihussain, Managing Director of BSRM Limited, told The Business Standard on Saturday.

The company reported that its revenue in FY23 was the highest in its six-decade journey, though its profit shrank to Tk291 crore from Tk308 crore the year before.

Aameir Alihussain, Managing Director of BSRM Limited, told The Business Standard, "Inflation puts pressure on us to increase the product price that helped us to achieve the record revenue. Besides, inter-company sales have increased slightly compared to earlier." He added that the  volume of rod and billet sales did not go in line with the revenue growth.

He stated how they struggled because of the dollar crisis, problems in opening LCs affecting supply of raw materials in time. "Due to these we are facing problems in production. We are not crisis free now. And within this problem we are trying to keep up the growth," the managing director said.

Supplying high grade steel to mega projects

The leading steelmaker provided high grade rod to mega projects including the Padma Bridge, Rooppur Nuclear Power Plant, Bangabandhu Tunnel and Dhaka Elevated Expressway. 

According to the company's website, BSRM Limited introduced its products when there was no graded steel in Bangladesh. It was a major change in the steel industry of the country. It is also the first steel brand that passed 5 million cyclic loading fatigue testing in the UK.  

Despite the heavy competition in this sector, BSRM could secure a 159% growth in revenue over the past five years. 

Of the three other listed companies with over Tk10,000 crore annual revenue, BATBC counts the highest Tk36,000 crore in 2022, Titas Gas Tk18,000 crore in FY2021-22 and Grameenphone earned Tk15,000 crore in 2022.

In the last fiscal year, MS Rod prices increased around 15-17% than the last year. Steel companies sold their rod at Tk90,000-94,000 per tonne, which was Tk80,000 a year ago.

However, BSRM Limited could not achieve growth in profit despite the record revenue. Business cost hike ate its profit in the FY2022-23.

It reported Tk291 crore profit, which was 5.51% lower over the previous fiscal year.

In January this year, the gas price for captive power plants rose to Tk30 from Tk16 (88% jump). For large industries, the price goes up to Tk30 from Tk11.98 (150% jump).

The company started the fiscal year by incurring loss. In the first quarter (July-September) of FY2022-23, it incurred a loss of Tk168 crore. After that, it recovered the loss and could post profit throughout the rest of the quarters.

According to the Bangladesh Steel Manufacturers Association (BSMA), the country currently has an annual demand of 70-75 lakh tonnes of MS rods. About 55 auto steel re-rolling mills and more than 100 semi-auto and manual mills in the country supply these rods, though a few large companies dominate the market of higher-grade quality steel products gradually reducing import dependence. 

The BSRM produced 50mm rods for Padma Bridge, demands for such rods were met from import until the 1990s.

Import of raw materials a concern

Company secretary of BSRM Shekhar Ranjan Kar said, now, there was no disruption in providing power and gas. But we are facing difficulties to open LC for importing raw materials. And because of this we are still not crisis free.

To consolidate its strong presence in the country's steel market, the BSRM plans to enhance its annual capacity of rolling by 6 lakh tonnes and melting 2.5 lakh tonnes to cater the growing market demand for quality steel products, according to the company website.

Meanwhile, BSRM Limited recommended a 25% cash dividend to its shareholders for the last fiscal year at a board meeting held on Thursday evening.

In the fiscal year 2021-22, it had paid a 35% cash dividend to its shareholders.

Its shares have been stuck on the floor price at Tk90 each since October 2022 on the Dhaka Stock Exchange (DSE).

Besides, BSRM Limited's sister concern BSRM Steels Limited, which is also being listed on the stock exchanges, also recommended to pay a 25% cash dividend to its shareholders for the last fiscal year.

During the fiscal, its revenue grew by 26% to Tk8,452 crore, compared to the previous fiscal year.

But its net profit fell by 9% to Tk297 crore over the last fiscal against the previous year.