GPH Ispat reports first-time loss as demand for steel shrinks

GPH Ispat reported a loss of Tk 246.78 million in FY25, the first since its listing, as demand for its products declined and production and finance costs increased.

According to a filing on Tuesday, the company's earnings per share fell to negative Tk 0.51 per share from a profit of Tk 1.77 per share in the previous year. In FY24, their profit was Tk 856.47 million.

One of the major reasons, according to the company's owner, is declining demand for steel.

The managing director of GPH Ispat, Mr Mohammed Jahangir Alam, told The FE that after the regime change in 2024, both private and public expansion projects were halted. "Many contractors on public projects left the worksites. The government went for retendering to restart those projects, so much time was lost.

"Besides public projects, private projects also slowed down. The expansion has been reduced to only 35 to 40 per cent of its potential, which has affected steel demand. The demand fell so low that we were unable to recover our overhead costs."

The full details of FY25 financials have not yet been published.

Experts said that as construction activity slowed, production volumes fell, leaving very little output to spread fixed costs, which increased the per-unit cost burden.

Moreover, importing raw materials became more difficult during the foreign-exchange crunch, limiting access or forcing higher-cost sourcing. Financing costs also contributed significantly to the loss.

Several months ago, the securities regulator rejected the company's plea to raise funds by issuing right shares, reducing its capacity to lower its financial burden.

The loss surprised investors, as the company had reported a Tk 304.85 million profit in the nine-month period.

Despite the loss, GPH Ispat's share price rose 0.59 per cent to Tk 17.10 per share on Tuesday on the Dhaka Stock Exchange (DSE). The company also declared a 5 per cent cash dividend for general shareholders for FY25.

farhan.fardaus@gmail.com