BBS Cables posted lower revenues and profits in the first nine months of the current fiscal year due to the Covid-19 lockdown and the consequent suspension of construction projects in both government and private sectors.
In this period, its revenues dropped 20%, and net profit by 31%, compared to the same period in the previous fiscal year.
To publish its nine-month financials for FY2020-21, the electrical wire and cable manufacturer has announced an earnings call for 1 June to be held online.
According to the company's financial statements, at the end of the first nine months of fiscal year 2020-21, its revenues stood at Tk490.42 crore, down from Tk614.90 crore in the same period of the previous financial year.
Moreover, for this period, its net profits dropped to Tk78.67 crore from Tk113.94 crore in the same period of the previous fiscal year.
Md Nazmul Hasan, company secretary of BBS Cables, told The Business Standard they had received orders from government organisations but those could not be delivered due to the pandemic, causing their revenue to fall.
"We sell 40% of our products to the government and the rest to corporates and retailers," he said, adding, "We were not able to achieve the sales target only due to the pandemic, but it was close."
Housing, construction, and power transmission projects stopped last year due to the coronavirus, causing the cable industry to slip into a crisis. The sector started recovering when the lockdown was withdrawn last year, but it is again facing the same crisis now, because of the ongoing lockdown.
During the strict lockdown imposed in April this year, retail shops selling BBS Cables products were closed, causing sales to come to a halt. This significantly affected the company's July'20-March'21 revenue.
In the third quarter of FY2020-21, from January to March, the company's revenues dropped 17% to Tk130.64 crore from Tk157.01 crore in the same period of the previous fiscal year. In this period of the current fiscal year, its net profits fell 29% to Tk20.45 crore, from Tk28.96 crore in the same period of the last financial year.
The company posted a 16.25% negative growth due to Covid-19 in fiscal year 2019-20. At that time, its gross profits fell 16.38%, and net profits by 20.14%. It recommended 10% cash and 10% stock dividends.
Industry sources say the cable industry market size is around Tk10,000 crore. Domestic companies can manufacture Tk7,000 crore worth of cables and the rest is imported. Around 120 local companies can meet more than 90% of domestic demand.
BRB Cables is the market leader in the cable industry. BBS Cables, which holds second position, manufactures around 18 types of cables, such as aluminium, silicon, power, railway signalling, submersible and flexible cables, telecommunication cables, and so on.
Eastern Cables sees loss despite higher revenue
Eastern Cables, a listed peer company of BBS Cables, saw a 12.39% growth in revenue in the first nine months of FY2020-21 compared to the same period in the last fiscal year. But at the end of this nine month period, it incurred losses due to the pandemic.
In this period of the current fiscal year , its net sales stood at Tk60.66 crore, up from Tk53.97 crore in the same period of the last fiscal year. It also incurred losses of Tk11.91 crore, which was Tk11.97 crore in the same period of the previous fiscal year.
The company registered a 51% drop in revenue in the third quarter from January to March. In this period, its net sales declined 51% to Tk10.21 crore, from Tk20.73 crore, compared to the same time frame in the previous financial year.
Also, during this period, it incurred a loss of Tk3.23 crore, which was Tk4.05 crore in the same period of the previous fiscal year.
The company, which is the biggest cable and conductor manufacturer in Bangladesh, produces domestic, control, flexible, and power PVC cables of various types and sizes.