Listed MNCs fared well in pandemic year
Reckitt offers the highest-ever dividend in the history of the stock market for an individual company so far
Despite stagnation in business and disruptions in supply chains during the Covid-19 pandemic, listed multinational companies in Bangladesh did good business.
Of them, fast-moving consumer goods (FMCG) manufacturers Reckitt Benckiser and Marico Bangladesh, posted brilliant growth in both revenue and profit in the financial year 2020.
British multinational Reckitt recorded a 19% profit growth. Based on its growth, the company will pay the highest-ever dividend to its shareholders amid the pandemic.
Reckitt will pay a 1,400% cash dividend, meaning its shareholders will get Tk140 against each share.
According to analysts, Reckitt's dividend is the highest-ever in the history of the stock market for an individual company so far.
On Wednesday, Reckitt's share price was Tk4,374 each at the Dhaka Stock Exchange and it is now the highest-valued share in the stock market.
Marico Bangladesh posted a 17% year-on-year profit growth, which was 30.78% a year ago.
It will pay a 900% cash dividend, which was 950% - the highest-ever amount since its listing on the stock exchanges - in the previous year.
Of the 13 listed multinational companies in Bangladesh, The Business Standard analysed the 2020 financials of 11 companies, as Bata Shoe and Berger Paints have not published their 2020 financials yet.
Data shows multinational companies in hygiene and healthcare sectors swelled in the pandemic, while cement manufactures, shoemakers, industrial gas and oxygen producers, home appliance manufacturers, and nutritious food makers witnessed a fall in revenue.
Grameenphone, HeidelbergCement, LafargeHolcim, Linde Bangladesh, RAK Ceramics, Singer Bangladesh, and Unilever Consumer Care saw a sharp decline in revenue.
Revenues of British American Tobacco, Reckitt, Robi Axiata, and Marico grew compared to the previous year.
Of the 11 companies, four saw a fall in profits, and six posted gains, compared to the previous year.
One company - HeidelbergCement - posted back to back losses in 2019 and 2020. But the cement maker managed to reduce the amount of losses in 2020, compared to the previous year.
As profits rose, British American Tobacco, Grameenphone, Reckitt, and Heidelberg will pay higher dividends, while Linde, Marico, RAK Ceramics, Singer, and Unilever Consumer Care have cut dividends.
HeidelbergCement did not pay any dividend in 2019. But the company will pay a 20% cash dividend to its shareholders for the year 2020 despite making losses.
Robi will pay no dividend and LafargeHolcim declared the same dividend as the previous year.
Professor Abu Ahmed, capital market analyst and former economics teacher at the University of Dhaka, told The Business Standard most of the listed multinationals posted higher profits amid the pandemic. However, some still cut dividends compared to the previous year, disappointing shareholders.
He said those investing in multinationals expected good dividends as the companies did well in the pandemic, but their expectations had not matched reality.
Dettol sales up, Horlicks down
While most industries crawled during the pandemic, consumer goods company Reckitt posted strong growth. According to its financial report, its growth was led by Dettol, Lysol, Durex and Finish, a dishwashing detergent.
Leading FMCG company Marico, which produces coconut and value-added hair oil, has navigated the pandemic well and come out strong with a continuous growth in sales by diversifying its portfolio.
Unilever Consumer Care, a health food drink company, posted lower revenue and profit. Its Horlicks, Maltova, Boost, Glaxose D, and Horlicks are among the top nutritious food brands in the country.
According to its annual report, sales revenue declined due to lower sales of Horlicks caused by a supply shortage of its dry mix ingredient.
Telcos' income from voice calls drops, but data revenues jump
Listed telecom operators Grameenphone and Robi saw a sharp fall in voice call revenues in 2020 while their income from data packages leaped.
Grameenphone said its voice revenue declined due to not only lower usage during the pandemic but also, in part, the introduction of an additional 5% supplementary duty in the budget.
Data revenues increased on the back of a rise in both the number of users and volume.
Robi said, compared to 2019, its voice revenue declined in 2020, indicating customers' growing reliance on over-the-top (OTT) platforms for making voice calls, but its data revenue grew.
Cement, ceramic companies see fall in revenue
LafargeHolcim, HeidelbergCement, and RAK Ceramics posted lower revenues as the pandemic hampered construction projects.
HeidelbergCement incurred significant losses for two consecutive years, but it declared a 20% cash dividend. LafargeHolcim posted lower revenue, but its profits jumped.
RAK Ceramics posted lower revenue and a 58% fall in profits due to Covid-19. The company said in its annual report its ceramic tiles sales decreased 14.49% and the sanitary ware division's revenue declined 26.43% due to the decrease in demand caused by the pandemic.
Cigarette demand higher than oxygen
British American Tobacco, which produces Benson & Hedges and John Player Gold Leaf cigarettes, posted an 18% growth in net profit. According to their annual report, its net revenue increased due to growth in finished goods exports.
Its net revenue from finished goods exports increased by 314% while domestic net revenue from cigarette sales jumped by 7.98%.
Leading industrial and medical gas producer Linde Bangladesh posted lower revenue and profit. Its revenue from bulk gas and packaged gas decreased due to the pandemic.
But its healthcare business comprising medical gases, medical equipment, and medical pipelines saw a robust growth of 24% compared to the previous year.
Sales of its bulk gases comprising liquid industrial oxygen, nitrogen, argon, and carbon dioxide decreased by 16% while packaged gas and product sales declined by 24%.
Singer Bangladesh's revenue and profit fell compared to the previous year. As its profits decreased, the company declared a lower cash dividend than the previous year.