Home ›› 19 Dec 2021 ›› Stock
ed by the Covid-19 pandemic, Linde Bangladesh has witnessed good business throughout the outgoing year and is likely to touch the profits seen before the pandemic.
The annual profits of the listed multinational gas producer are estimated to stand at Tk 120.6 crore in 2021, close to Tk 123 crore of 2019, said EBL Securities in an equity note.
In the face of Covid-19 outbreak in the middle of 2020, the gas company encountered some major setbacks in oxygen production in its Rupganj and Shitalpur plants and was forced to suspend oxygen supply to industries.
Besides, the nationwide shutdown triggered by the pandemic disrupted the gas company’s supply chain. In consequence, its sales and profits declined 17 per cent and 3 per cent respectively.
However, Linde Bangladesh managed to continue the supply of medical oxygen what helped it to remain afloat.
Its net profits plunged to Tk 107 crore in the year.
In January this year, the gas company resumed production activities in Rupganj and Shitalpur plants and met the higher demand for medical oxygen amid the second wave of Covid-19.
According to the company’s Q3 report, its net profits increased more than 24 per cent to Tk 90.41 crore in the January-September period this year, which was Tk 72.78 crore in the previous year’s corresponding period.
EBL Securities noted that Linde Bangladesh is expected to retain the profit streak in the last three months and reach the pre-pandemic level though its sales in the non-healthcare segments declined to a significant extent.
Linde Bangladesh is a zero leverage company. There is no short-term or long-term debt in its capital structure. All capital investments have been borne from the company’s own resources. As a result, it has no financial risk, added the equity note.
The company has a plan to build a debulking station near Benapole port which would act as a buffer station for the supply Oxygen and other gases. This investment would help a reliable distribution channel, expects the company.
It is also revamping its Shitalpur plant which would help generate higher yield and achieve more efficiency.
In addition, the company is planning to build another air separation unit in the country in the next three or four years.
The research also noted that the company’s good performance was mostly driven by growth in medical sales during the first two-quarters of FY21.
As the pandemic is slowing down, demand for medical gases declined and the company suffered 9.44 per cent sales decline in the third quarter of current year.
Apart from that, the company imports most of its raw materials. Devaluation of the local currency against the greenback would drive up its cost of sales, mentioned the EBL equity note.
The company’s share price has been in an upward trend since the previous month. The price increased around 23 per cent to Tk 1,692.9 on the Dhaka Stock Exchange on December 15, compared to that of November 30.
Linde BD operates its business in three segments- bulk gases, packaged gas and products (PG&P) and healthcare. Growths in shipbuilding, steel and healthcare industries are some of the major drivers of growth in its business.
