Sales of BSRM, the top steel industry in the country, reduced by Tk 3,602 crore or 49 per cent in 9 months over the same period of the previous financial year.Following the slow sales growth the net profit within this period has decreased by Tk 111 crore as compared to the previous year.
However, the operating expenses, sales and marketing expenses and financial expenses of the two companies have increased over the previous year. This information was obtained by analyzing the quarterly (July-September) reports published by Bangladesh Steels Re-Rolling Mills Limited and BSRM Steels Limited, two registered steel companies in the capital market.
According to sources, Bangladesh Steel’s re-rolling mills Limited and BSRM Steels Limited, which are registered in the steel market, had a total sales of Tk 7,332 crore at the end of the three quarters (July-March). In the same period of the previous financial year, the sales were 10 thousand 934 crore. In other words, sales have decreased by Tk 3,602 crore as compared to the previous year. And in the first 9 months of the 2019-20 financial year, the net profit of both the companies stood at 183 crores. The net profit for the same period of the previous financial year was Tk 264 crore.
Analyzing the data for the three quarters, it can be seen that the combined management, sales and marketing expenses of the two BSRM Group companies stood at Tk 253 crore. In the previous financial year, the expenditure was Tk 220 crore. In other words, the expenditure has increased by Tk 32 crore. Similarly, the total financial expenditure in the three quarters of FY 2019-20, including loan interest, was Tk 464 crore, which was Tk 441 crore in the previous financial year. In other words, the financial expenditure has increased by Tk 23 crore as compared to the previous year.
On the other hand, at the end of March, the total stocks of both the companies were Tk 2,858 crore. In the same period of the previous financial year, the amount was three thousand 612 crore. That means stocks have increased at this time. The total debt (short and long term loans) of the companies for conducting business activities for 9 months was Tk 6,792 crore, which was Tk 7,026 crore in the same period of the previous financial year. In other words, the debt of the company has also increased.
Steel insiders say the country’s steel sales have been stagnant since before the Corona situation began. The progress of ongoing development and infrastructural projects in the country is slow. And due to the Corona situation, the projects at the public and private levels are stalled. As a result, there is a supply of steel several times more than the demand in the market. The big companies are under good pressure. In this case, small companies are good. Because their production is low. Besides, the international steel market is in a slump.