Corporate results show recovery in Bangladesh

Some major companies from a wide range of sectors, including pharmaceuticals, fast-moving consumer goods (FMCG), construction materials, and fuel and power, have performed better in the second quarter of the current fiscal year compared to the pre-Covid-19 levels, raising hopes for their faster recovery from the pandemic shocks.

A comparative analysis of 130 listed companies in that quarter shows most of them posted positive growth in profits compared to the same period of the previous fiscal year.

Also, the year-on-year sales growth of many companies, including consumer and industrial goods manufacturers, indicates that demand has turned robust.

But some sectors, such as hospitality, paper, textiles, and automobile, are still facing some challenges in business, said Mohammad Rehan Kabir, senior research associate at EBL Securities Ltd.

Construction material manufacturers almost back on track

Md Shahidullah, secretary general of Bangladesh Steel Manufacturers Association and vice-president of Bangladesh Cement Manufacturers Association, said the pace of development work seems to have returned almost to the pre-pandemic levels, which is helping the construction materials industry recover from the pandemic blows.

Leading steelmaker BSRM Steels Ltd registered more than 20% sales growth in the last quarter compared to the same period a year ago. Its profits also increased in line with sales.

Shekhar Ranjan Kar, chief financial officer of the company, said both individual home builders and project managers are buying their steel and the demand is higher than the pre-pandemic levels at least for BSRM products.

BSRM tends to beat the industry most of the time.

Steel raw materials prices and increased freight charges for the cement industry on top of some unfair tax burdens remain a concern for both industries, said Shahidullah.

GPH Ispat's modern mega plant equipped with induction furnaces came into operation in the last quarter, which helped the company post a much higher profit with increased sales.

Beating its own July-September quarter performance, Premier Cement Mills registered more than 20% year-on-year sales growth in the October–December quarter. Its profit also more than doubled in that period.

MI Cement and Premier Cement registered higher turnover and profits, too.

Paint giant Berger Paints Bangladesh posted a double-digit sales growth in the last two quarters in a row and is on its way to offset the 50% decline in sales during the April-June period caused by the lockdown.

Its profit recovery outpaced that of sales.

Sazzad Chowdhury, director and chief financial officer of the company, is now more optimistic to see moderate growth of the industry in this fiscal year, though he earlier had estimated that FY21 might be a flat year.

Consumers also spending enough

Not only bulk item buyers, but also consumers are feeling free to spend on what they need.

Biscuit king Olympic Industries saw a double-digit sales growth in the last two quarters as people preferred packaged biscuits instead of eating non-branded local snacks or even dining out during the pandemic.

Haircare champion Marico Bangladesh is continuously posting a double-digit sales growth, with even better profits.

The demand for electronics, home appliances, gadgets, and internet devices and data has been rising since the lockdown.

Singer Bangladesh partially recovered the sales it had lost during the lockdown. Its competitor Walton posted lower sales and profits in the previous quarter and it is time to wait for the updates till December 31.

The pandemic boosts

Sales and profits of Beximco Limited, a conglomerate which dominantly owns textile and apparel businesses, increased more than 2.3 times and 6.7 times respectively, mainly due to bulk exports of personal protective equipment.

Also, Beximco Pharmaceuticals sales grew by 15%, and profits by 30%, in the first half of FY21, thanks to the increase in exports and extended production capacity.

Square Pharmaceuticals posted around a double-digit growth in sales and profits in the last two quarters.

Riding on the sales of antiviral drug Remdesivir, Beacon Pharmaceuticals reported higher sales in the last quarter while its profits grew seven times.  

ACI Limited, a local conglomerate that offers a wide range of consumer items and hygiene products, returned to net profit as soon as the lockdown was lifted after incurring losses in seven consecutive quarters.

Alongside a double-digit sales growth, cost control and reduced interest expense due to rate cut helped the leveraged company improve its bottom line.

ACI Formulations, which manufactures and sells agrochemicals, also saw a double-digit growth in sales and profits in the last quarter.

Independent power producers Summit Power and United Power posted higher profits in the October-December quarter.

The subdued ones

The automobile sector as a whole is yet to recover fully.

Ifad Autos, assembler of Ashok Leyland commercial vehicles, posted profit growth in the last quarter and investors are waiting for the latest updates.

Its managing director Taskeen Ahmed, in a recent interview with The Business Standard, said truck sales were still down, but bus and small pickups were selling better amid the pandemic.

Runner Automobiles, the seller of Runner, Vespa, Aprilia, UM, and KTM two-wheelers and also the holding company of Volvo Eicher commercial vehicles seller Runner Motors, saw its profits drop in the July-September period.

But its profit grew a little in the latest quarter compared to the same period a year ago.

State-owned gasoline sellers Padma Oil, Meghna Petroleum, and Jamuna Oil recovered their operational income but posted less profits due to reduced income from fixed deposit receipts (FDRs) as they rely more on financial income than operational profits.

As schools remain closed for long, paper producers are still seeing subdued sales, but the use of tissue papers has increased.

Bashundhara Paper Mills, the market leader in tissue papers, saw lower revenue and profit in the July-September period, but in the last quarter, its sales and profit rose compared to the same period a year ago. 

Mainly, the demand for tissue papers increased the company's profit by 116% in the October-December quarter.

Sonali Paper earnings per share (EPS) grew by 46% in the last quarter.

In the textile, spinning, and apparel sectors, some companies like Maksons Spinning made better profits while the majority are still struggling.