SS Steel sees dramatic growth in profits on subsidiary revenues

SS Steel Limited posted 49% profit growth in fiscal year 2020-21 thanks to revenues from its subsidiary, which the publicly traded steel maker acquired a year ago.

At the end of the year, it reported a consolidated profit of Tk70 crore, which was Tk47 crore a year ago.

Last year, SS Steel acquired 99% of the shares valued at 160 crore of Tk from Saleh Steel located in Chattogram.

Saleh Steel produces and sells rods and coils under its brand and its annual production capacity is around 84,000 tonnes, says SS Steel.

“We have achieved such growth that the steel market has recovered from the difficult period caused by the pandemic. In addition, our subsidiary has contributed to the growth,” said SS Steel President Javed Opgenhaffen, at The Business Standard.

“But if the rise in commodity prices continues, the steel market will remain volatile in the coming days,” he added.

At a board meeting on November 24, the company declared a 2% cash dividend for general shareholders only and an 8% stock dividend for all for fiscal 21.

According to the audited financial report for fiscal year 21, its consolidated earnings per share amounted to Tk 2.31.

To approve the dividend, the company will hold an annual general meeting on December 31, and the registration date has been set for December 15.

The board of directors also decided to spend Tk 20 crore on the purchase of land and investment machinery for the expansion of its business.

Despite the expansion plan and dividend news, its stock price fell 4.44% to close at Tk 21.50 on Thursday on the Dhaka Stock Exchange (DSE).

In January of this year, SS Steel decided to acquire a 75% stake in Southeast Union Ceramics Industry Limited, a Bangladesh-based coal-based ceramic manufacturing joint venture, at a cost of Tk 200 crore.

The shareholders of the steel company also approved the acquisition proposal at an extraordinary general meeting.

The company also signed an agreement with City Bank to arrange financing of Tk 200 crore as a term loan and Tk 100 crore as working capital for a consortium of banks and non-financial institutions. banks for the acquisition of the ceramic factory.

The president of the company said, “We are working on it. After the acquisition is completed, we will disclose it as price sensitive information.

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