How BSRM cos, Crown Cement returned to profits in Jul-Sep

Three publicly listed companies in the construction sector, which had incurred losses in the July to September quarter last fiscal, returned to profits in the same quarter of the ongoing fiscal year despite prevailing economic challenges. 

The companies are Crown Cement PLC, Bangladesh Steel Re-Rolling Mills (BSRM) Limited, and BSRM Steels Limited. 

In the first quarter of fiscal 2023-24, Crown Cement made a profit of Tk34 crore, BSRM Ltd Tk88 crore, and BSRM Steels Tk45 crore, which were losses of Tk5.3 crore, Tk131 crore, and Tk34 crore respectively in the same quarter previous fiscal. 

Against the backdrop of high inflation and a foreign currency crisis, here's how the companies navigated the inflationary pressure through strategic measures. One such measure involved reducing the cost of production, while another entailed adjusting product prices to align with the increased costs of raw materials.

According to the financial statements of the three firms, foreign exchange rate did not fluctuate as much in this year's September quarter as it did in the previous year's. 

However, the dollar shortage continues to impede the opening of letters of credit, posing challenges for the importation of raw materials. This has emerged as a significant concern, hindering the seamless operation of factories, as noted by industry insiders.

Crown Cement

In the first quarter of FY24, the cement maker's revenue grew by 22% year-on-year and stood at Tk621 crore. Its quarterly earnings per share (EPS) in FY24 stood at Tk2.32. 

In its financial statement, the company attributed its revenue growth to various sales initiatives, notably raising its cement price by 10.56%, which translated to a 10.71% growth in sales volume. 

Also, the company stated that its curbing of factory overhead cost per bag of cement by 21.74% and finance cost by 20% helped Crown Cement to recover last year's quarterly loss. 

However, current tax expenses went up by 36% due to the impact of imposing a minimum tax on cement businesses, the company further stated. 

At the Dhaka Stock Exchange (DSE), the company's shares closed 3.1% higher at Tk77.5 each on Monday, compared to the previous trading session. 

BSRM companies

The revenue of BSRM Ltd decreased by 3% year-on-year to Tk2,020 crore in Q1 of FY24. Its EPS stood at Tk2.2. 

An 8% year-on-year decline in cost of sales and a 59% drop in finance cost are what helped the firm to post profit in Jul-Sep of FY24, according to the company's financial statement. 

The revenue of BSRM Steels fell by 12% year-on-year to Tk1,480 crore in Q1 of FY24, and its EPS stood at Tk1.21. The company reduced its cost of sales by 17% and finance cost by 30% compared to the September quarter of FY23. 

On Monday, the share price of both firms stayed the same as they were in the previous trading session at the DSE. BSRM's shares are trading at Tk90 and those of BSRM Steels at Tk63.9 apiece.