At least 14 publicly traded companies in Bangladesh incurred losses in the July-March period of the fiscal year 2022–23, but they all were in profit in the same period the year before.
The forex volatility and a steep rise in global energy prices were the prime reasons that eroded the companies’ earnings and subsequently led them to the losing territory, company officials said.
The negative earnings were mainly attributed to a decrease in sales due to different sorts of adversities, as per the Dhaka Stock Exchange (DSE) data.
Of the companies, seven are from the engineering sector, three from the power sector, two from the tannery, one from the pharmaceutical, and the rest from the travel sector.
The loss-incurring firms are ACI Limited, Runner Automobiles, IFAD Autos, GPH Ispat, Bd Thai Aluminium, Golden Son, Quasem Industries, Yeakin Polymer, Baraka Patenga Power, Dhaka Electric Supply Company, Power Grid Company of Bangladesh, Apex Tannery, and Legacy Footwear Limited.
ACI Limited, a local business conglomerate, reported losses worth over Tk 11 crore in the first nine months of FY23, compared to Tk 43 crore in profits in the same period of the year before.
The company’s earnings per share (EPS) stood at Tk 1.45 negative for the July-March period of FY23 against Tk 5.67 for the same period one year ago.
The staggering surge in production costs due mainly to currency exchange volatility, energy price hikes, and high import costs, coupled with inflated financing costs, depleted the conglomerate’s overall profitability, according to its financial report.
Meanwhile, the company reported a loss per share of Tk 1.45 for the first nine months of the last fiscal against earnings per share (EPS) of Tk 5.67 for the same period of FY22.
The conglomerate is engaged in the manufacturing of pharmaceuticals, consumer goods, and animal health care products and marketing them along with fertilizer, seeds, and other agricultural items. ACI Logistics Limited, or Swapno, is a chain of supermarket brands and a subsidiary of ACI Ltd. Shwapno is the largest retail chain in Bangladesh.
Runner Automobiles, a local vehicle maker, posted a net loss of Tk 48 crore in the July–March period of the fiscal year 2022–23.
Due to higher product prices and fuel costs, many buyers shelved their purchase plans, leading it to a negative earning territory, said Shanat Datta, chief financial officer (CFO) of Runner.
Runner’s three-wheeler manufacturing plant, which went into operation in February this year, helped it increase sales as Bajaj-branded three-wheelers attracted customers with price benefits, he added.
Meanwhile, IFAD Autos, the sole distributor of Indian Ashok Leyland in Bangladesh, suffered losses of Tk 8 crore in the first nine months of FY23 despite higher revenue.
An official of the company, on condition of anonymity, said the foreign exchange loss multiplied by 13 times in the period compared to the previous fiscal year, eroding its profit. The unprecedented devaluation of the taka against the US dollar was the reason behind those losses.
With a lack of industrial power supply and an inimical US dollar price, steel maker GPH Ispat incurred a heavy loss of Tk 31.13 crore in the first nine months of the fiscal year 2022–23, although its nine-month revenue was 25 per cent up on a year-on-year basis.
Against this massive loss, the publicly traded company had a net profit of Tk 156 crore in the July-March period of the fiscal year 2021–22.
Although the steel maker reported a loss in the July-March period of fiscal 2022–23, the company’s revenue grew by 25 per cent to Tk 4,410 crore in the period, as per its unaudited financial statement.
The company’s revenue was Tk 3,527 crore in the first nine months of FY22.
Detailing the reasons behind the profit fall, the steel maker said its earnings were wiped out in the first three-quarters of FY23 due mainly to a massive increase in the foreign currency conversion rate as well as the shortage of industrial power supplies, which hampered its production inimically.
The costly dollar prices and the scarcity of industrial power supply disrupted its production to a great extent, the Chattogram-based company said.
The domestic currency lost its value by around 25 per cent in July–March of FY23 because of the crisis of the US dollar since the beginning of the Russia–Ukraine war.
The Peninsula Chittagong’s net losses reached Tk 3.37 crore in July–March of the financial year 2022-23, mainly due to higher sales costs. In the same period of the previous fiscal year, the company made a profit of Tk 8.54 crore.
Apex Tannery Ltd – a 100 per cent export-oriented leather processing and finishing company – reported a loss of Tk 8.22 crore in July-March FY23, against a profit of Tk 0.42 crore in the corresponding period of the previous year.
The company said its profit decreased due to a drop in sales, an increase in chemical cost, as well as fixed factory overhead and sales promotional expenses.
Legacy Footwear posted a loss of Tk 1.17 crore in the July-March period of FY23 compared to a profit of Tk 7.84 lakh in the same period of the previous year.
Golden Son Limited, another listed company, incurred losses of Tk 9.6 crore in the first nine months of FY23, compared to a profit of Tk 7.8 crore in the same period of one year ago.
Dhaka Electric Supply Company reported earnings per share (EPS) of Tk 3.44 negative for the July-March period of FY23 against EPS of Tk 0.56 for the same period of the previous year.
Power Grid Company of Bangladesh in the first nine months of 2022-23, reported earnings per share of Tk 4.66 negative against EPS of Tk 3.92 for the corresponding period one year earlier.
Baraka Patenga Power Limited in the first nine months of FY23 posted a loss of Tk 18.16 crore, compared to a profit of Tk 54.66 crore in the same period of FY22.
Among other loss-makers, Bangladesh Thai Aluminium Limited made Tk 5.11 crore in loss, Quasem Industries Tk 0.50 crore, and Yeakin Polymer Tk 5.8 crore in the first nine months of FY23. They all were in profit in the July-March period of FY22.