BECO reported earnings per share of PKR 0.09 in FY25 vs loss per share of PKR 0.07 in FY24. In 1QFY26, the EPS remained PKR 0.12 (1QFY25: 0.00).
Management projects that sales will double once the new plant becomes operational. The target sales for the upcoming fiscal years FY26-27 are projected to reach around PKR 15 billion. Gross margins are expected to remain stable. This stability is contingent on international fluctuations remaining minimal and the current import rate not being significantly affected. The copper market is highly volatile, being dependent on the London Metal Exchange.
Current margins in copper sales are described as good and quite better. Profitability is currently high because the LME for commodities including gold and copper is increasing. Management noted uncertainty regarding future profitability if a market slump occurs.
The rebar plant is anticipated to come online around October 2026. The overall new plant construction is the primary focus, and the funds raised will be used for setting up the new plant machinery and the 5 MW solar setup. The per-unit cost to produce rebar is approximately 50 rupees per kg.
This cost calculation includes re-melt, continuous casting, and rolling processes. The production process consumes a total of 810-820 units of WAPDA electricity per ton of rebar. BECO currently sells Angles indirectly to WAPDA through other sources. These intermediate companies galvanize the raw product before selling it to WAPDA.
The company is currently seeking approval and expects to receive news within a month regarding the ability to galvanize and sell directly to WAPDA. The company currently carries land on a cost basis. There are no plans for revaluation no such revaluation is currently on the balance sheet. The recent increase in authorized capital and the sale of shares by the sponsor were executed to secure funds for the new plant. The company is avoiding external loans/financing and relies on internal funding. All proceeds from the recent shares sold by the sponsor will be introduced into the company as a loan from directors.
The balance sheet already reflects approximately PKR 240 million in loans provided by sponsors, with no bank financing. BECO’s current line of business differs slightly from its main competitors. The company primarily focuses on B2B selling. Round Bars are sold for use in items like motor shafts/rotors are supplied to companies such as GFC Fans, Pak Fans, and Millat. Angles are sold for WAPDA requirements.
Channels are used in the upper structure of solar installations, capitalizing on the current solar market boom. Amreli and Mughal, focus on rebar/deformed bars. BECO currently does not directly compete with them. However, once the new plant is operational, BECO will produce Rebars and Deformed Bars. The company expects to be cost-effective and will then be positioned to compete directly with Amreli and Mughal.
Important Disclosures
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