Shipping Corporation's profit up on higher freight charges

Bangladesh Shipping Corporation (BSC) showed a 7.0 per cent year-on-year increase in profit to Tk 536 million in the second quarter of FY25.

Factors that contributed to the profit growth were increased freight rates, enforcement of the Bangladesh Flag Vessels (Protection) (Amendment) Act, appreciation of the US dollar and higher interest income on fixed deposits.

The Russia-Ukraine conflict led to a surge in global freight charges, boosting BSC's revenue from international shipping operations. Hence, despite having two ships destroyed in fire in October last year, the BSC performed better in Q2 FY25 than in the same period of the previous year.

BSC Managing Director Commodore Mahmudul Malek told The FE that in the second quarter through December last year international freight cost was high. "So we have earned high revenue. Besides, our management was very serious about cost control.

"But in the running quarter freight cost is declining."

BSC's earnings per share (EPS) stood at Tk 3.52 for the October-December quarter of FY25, increased from Tk 3.29 for the same quarter the year before.

The company experienced a significant increase in earnings in the five years through FY24; profits rose from Tk 17 crore in FY19 to Tk 250 crore in FY24.

The Bangladesh Flag Vessels (Protection) (Amendment) Act mandates that government entities, such as the Bangladesh Petroleum Corporation and the Bangladesh Chemical Industries Corporation, prioritize BSC for their import needs.

BSC charges for its services in US dollars. The appreciation of the dollar against the Bangladeshi taka -- from Tk 82-86 a dollar to around Tk 120 a dollar -- resulted in higher revenue when converted to the local currency.

Increased interest rates also contributed to the BSC's financial growth.

The company's income in the first half of FY25 jumped more than 42 per cent year-on-year to Tk 1,426 million.

According to the company, the increase in profit was again due to an increase in international revenue.

Meanwhile, the stock fell 1.02 per cent to Tk 87.10 per share on Tuesday on the Dhaka Stock Exchange (DSE).

With the escalation in profit, cash flow also increased to Tk 20.10 per share for July-December 2024 from Tk 15.84 per share for July-December 2023.

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