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Most listed multinational companies (MNCs) witnessed negative growth in the year 2022 due mainly to a shar rise in their production costs, triggered by the soaring raw materials prices in the global market as well as the devaluation of the domestic currency against the US dollar.
Out of the 13 MNCs listed on the Dhaka bourse, nine companies disclosed their financial statements for 2022.
Of the nine multinationals, four companies saw profit growth last year, while the remaining five firms witnessed negative profit growth in the year, according to data available on the DSE website.
The companies had suffered losses in the just-concluded year because of a steep rise in their production costs and other expenses, triggered by the soaring raw material prices in the global market amid the Russia-Ukraine war.
Meanwhile, the rising dollar value against the taka also burned through their cashbooks, market insiders said.
Rajeev Sethi, CEO of Robi, said the soaring inflation rate made it difficult for the telecom company to control its expenses, which also impacted its financial performance.
Singer Bangladesh reported that its net profit plunged to Tk 7.3 crore in 2022 against Tk 51 crore in 2021.
Even the electronics maker had the lowest profit last year over 14 years.
The company said the cost of sales increased significantly last year. The cost surged due to price hikes of raw materials, inflated freight costs, and the devaluation of the taka amid the Russia-Ukraine war.
Linde Bangladesh Ltd, a medical and industrial gas manufacturer in the country, reported the lowest net profit in 2022 over six years.
The company’s profit declined by 28 per cent to Tk 88.32 crore in 2022 compared to Tk 122.58 crore in 2021.
Meanwhile, despite making significant investments over the last two years to increase production capacity, the profit of RAK Ceramics, a leading maker of tiles, sanitaryware, and porcelain tableware, shrank in 2022, mainly due to a staggering rise in production costs.
The company’s net profit fell by over 25.5 per cent year on year in 2022, after it grappled with multiple crises in the year, which included production cuts due to the gas shortage, a hike in raw material prices, and volatile currency transactions.
The listed firm’s net profit dropped to Tk 67 crore in 2022 from Tk 90 crore in the previous year.
The ceramics industry is heavily reliant on gas, as ceramics production requires a high flow of gas supply to get the products finished, according to industry insiders, it said.
Moreover, Reckitt Benckiser (Bangladesh), the maker of Dettol and Lysol disinfectants, saw its profit falling to Tk 65.91 crore in the year that ended on December 31, down 18.44 per cent year-on-year.
Its profit was Tk 80.81 crore in 2021.
Besides, the country’s largest telecom operator – Grameenphone – saw its net profit trickle down by 12.09 per cent year-on-year in 2022, although the multinational’s revenue grew by 5.12 per cent in the same year.
The publicly traded company’s profit fell to Tk 3,009 crore in 2022 from Tk 3,412 crore the year before.
The telecom operator’s profit was adversely impacted by foreign exchange losses and a negative verdict in legacy litigation last year, according to the company.
Due to a regulatory ban on the sale of SIM cards during the second half of the year, the company registered a 5.12 per cent YoY lower subscriber base, reaching 7.91 crore at the end of 2022.
Robi Axiata, the second-largest telecom operator in Bangladesh, reported a flat financial performance in 2022, registering a 1.66 per cent paltry growth in net profit against that of the previous year.
Meanwhile, the listed multinational’s revenue stood at Tk 8,586 last year which was only 5.4 per cent higher than the figure of Tk 8,142 crore in the previous year.
The company suffered a significant blow to its financials due mainly to a massive forex loss, knocking off nearly half of its net profit in 2022, the report says.
Owing to an unstable foreign currency exchange rate, as per its annual financial report, the company found it difficult to manage its financial operations efficiently.
Moreover, a slowdown in imports caused by the restriction on the LC openings also posed a major challenge for the telecom operator to stay afloat.
Rajeev Sethi, CEO of Robi, said they had a disappointing year in 2022 due to a significant loss in foreign exchange and the enforcement of a 2 per cent of minimum tax by the country’s exchequer.
On the contrary, in 2022, the after-tax profit of British American Tobacco (BAT) Bangladesh surged by 19.4 per cent to Tk1,787 crore from Tk1,497 crore in the previous year.
Besides, cement maker LafargeHolcim Bangladesh Limited (LHBL) reported that its earnings per share stood at Tk 3.83 for the year ended in December 2022, up from Tk 3.34 for the year ended in December 2021.
Moreover, Unilever Consumer Care Ltd posted a 38 per cent rise in profit after tax in FY22, at a time when other listed multinational companies reported declines in profits due to the global economic slowdown.
Unilever posted a net profit of Tk 73.04 crore in FY22, compared to Tk 52.7 crore in the same period previous year.
The listed multinational companies have been playing a crucial role in keeping the Bangladeshi capital market vibrant as their collective contribution to the market capitalisation of the Dhaka Stock Exchange is more than 26 per cent.
