Most listed multinational companies (MNCs) witnessed negative growth in the second quarter (April-June) of 2024 due mainly to a rise in their production costs, triggered by the soaring raw material prices in the global market, inflation and the devaluation of the taka against the US dollar.
Out of the 13 MNCs listed on the Dhaka Stock Exchange, 11 companies have disclosed their financial statements for the April-June period.
During the Q2 of 2024, 11 MNCs’ total net profit was Tk 1,307.63 crore, which was Tk 1,654.7 crore in the same period of the last year.
Of the 11 companies, four saw profit growth in Q2 of 2024 while the remaining seven saw negative profit growth, according to the companies’ unaudited financial statements.
LafargeHolcim Bangladesh (LHBL), the multinational cement maker, posted a 33 per cent year-on-year fall in profit in H1 of 2024 as the economy is going through certain challenges that are affecting the construction industry, resulting in a decline in the company’s sales growth.
The publicly traded company’s net profit declined to Tk 243 crore in H1 of 2024, from Tk 361 crore recorded in H1 of 2023.
As per the company’s financial statement, its revenue fell 8 per cent year-on-year to Tk 616 crore in Q2 of 2024. Thus, the EPS stood at Tk 0.69 in Q2, a fall of 53 per cent year-on-year.
LHBL CEO Iqbal Chowdhury said that the Bangladeshi economy is going through certain challenges that are affecting the construction industry, resulting in a decline in sales growth during the first half of 2024.
“However, our focus on sales channel expansion, stronger aggregates performance, digitalisation and addressing the waste challenges through Geocycle remained consistent. With continuous emphasis on Agility, Cost & Innovation, we are confident to demonstrate solid performance in the quarters to come,” he said.
Meanwhile, Bata Shoe Company Bangladesh reported that its net profit plunged 38 per cent to Tk 18.78 crore in Q2 of 2024 as the sales value declined because of the low demand driven by the high inflation.
Its revenue fell by 19 per cent to Tk 261 crore in Q2, against the same period of 2023.
Heidelberg Cement Bangladesh, the maker of the well-known brand ScanCement, has reported an EPS of Tk 0.50 in Q2 of 2024, a sharp drop from Tk 1.61 recorded in the same period of 2023.
Singer Bangladesh Limited has reported a 45 per cent drop in net profit for Q2 of 2024, compared to the same period of last year, due to higher costs and foreign exchange issues.
It reported a net profit of Tk 25.7 crore for Q2, down from Tk 47 crore in Q2 of 2023.
The company said the margin was lower by 2.8 per cent compared to 2023, affected by higher sales of trade goods, including locally sourced products, increased discounts and promotional activities. The product SKU and sales channel mix also negatively impacted the margin.
Due to the costs of higher advertisement and sales promotion, shop operating expenses (opening new shops, rents and repair), maintenance expenses of the new factory and IT-related expenses, the total operating expenses rose to 17.7 per cent of turnover, compared to 17 per cent of last year.
Additionally, significant currency depreciation in May (approximately 7 per cent) resulted in a foreign exchange loss.
Grameenphone registered higher revenue in Q2 of 2024, yet its profit dropped mainly due to higher tax expenses. The company’s board, however, recommended a 160 per cent interim cash dividend to be paid out in the quarter.
The profit was supposed to be higher thanks to a rise in turnover and a decline in finance costs. However, the bottom line plunged around 28 per cent to Tk 861 crore.
"The macroeconomic headwinds that have been prevalent since last year exacerbated due to the central bank's continued tightening policies, calibration of energy prices while reducing subsidies, the increase of supplementary duties and the effects of natural disasters such as cyclones and flood," said Grameenphone CEO Yasir Azman.
RAK Ceramics incurred a loss of Tk 94 lakh in Q2 of 2024 despite logging profits of Tk 12 crore during the same period last year. It is the only MNC to suffer losses so far this year.
The company said the primary reason for its losses is that they had to reduce production due to the lack of gas supply.
Meanwhile, Robi Axiata posted a remarkable 341 per cent year-on-year growth in profit to Tk 107 crore in Q2 of 2024, supported by higher revenue growth coupled with efficient cost management.
Marico Bangladesh Limited, a beauty and wellness brand, said its profit soared 30 per cent year on year to Tk 172.57 crore in Q2 of 2024.
The maker of Parachute Coconut Hair Oil could post this profit growth because of a surge in its net finance income and a reduction in cost of sales, according to its audited financial statement.
Unilever Consumer Care's profits rose slightly even though its sales dropped. The company's profits increased 12 per cent to Tk 18 crore while its sales fell 6 per cent to Tk 77 crore.
Linde Bangladesh reported a profit of Tk 10.11 crore in Q2 of 2024. This was a 46.52 per cent increase from the Tk 6.90 crore it generated in profits in the same period last year.
