73% government companies perform well

Of the 17 government companies listed with the stock market, 15 declared dividends in the fiscal year 2018-19. 

Eleven companies recommended dividends. Whereas three companies did not distribute any dividends to the shareholders due to loss. Despite making profit one company did not recommend any dividend.

Fuel and power sector companies are the top government companies that made a profit in the last fiscal year. However, engineering and food sector companies are making losses.

Former caretaker government adviser AB Mirza Azizul Islam told The Business Standard that the government companies listed with the stock market are doing somewhat better than other public companies. The reason is the listed companies have to comply with corporate governance to some extent, he explained.

Government companies are monopolising the information technology, fuel and power sectors, said Mirza Aziz, while pointing out that they are not doing well in the competitive market.

 In the fuel and power sectors, the government companies are doing their best.

Dhaka Electric Supply Company Limited (Desco) and Power Grid Company of Bangladesh (PGCB) had more profit growth in the last fiscal year. So, these companies recommended more dividends to shareholders than in the previous fiscal year.

Desco's profit soared by 133 percent. The company paid a cash dividend of 12 percent in the last fiscal year.

Saiful Islam, executive director of Desco, said the company's profit increased with the rise in electricity tariffs and sales.

PGCB's profit increased by 76 percent in the same period. The company paid a cash dividend of 20 percent during that time. 

Golam Kibria, managing director of PGCB, told The Business Standard that PGCB is the only company transmitting power throughout the country. The profit of the company increased in the last year as it increased its power transmission lines.

Meghna Petroleum Limited's profit grew by five percent in the last fiscal year. The company recommended 150 percent cash dividend to its shareholders. 

Profits of Eastern Lubricants Blenders Limited and Padma Oil Company Limited were down compared to the previous year. 

Eastern Lubricants and Padma Oil's profit fell by 35 and 15 percent separately. The companies recommended cash dividends of 100 and 130 percent respectively. 

Eastern Lubricants' Managing Director Mohiuddin Ahmed told The Business Standard that oil price hike in the global market affected the company's profitability.

Profit of Titas Gas Transmission and Distribution Company Limited increased by 37 percent in the last fiscal year. At this time, the company recommended 26 percent cash dividend to the shareholders.

Titas Gas' officials have said a focus on curbing system losses and illegal connections have helped the company make more profit.

Meanwhile, internet usage in Bangladesh is increasing rapidly. So, Bangladesh Submarine Cable Company Limited's, the company exclusively supplying internet in the country, profit rose by 707 percent – highest among the government companies. 

Company Secretary of Bangladesh Submarine Cable Abdus Salam Khan said as the second submarine cable had become fully operational, the company's profit increased.

The state-owned Bangladesh Shipping Corporation added six vessels to fleet last year, said its Company Secretary Khaled Mahmud. As a result, the company's profit increased by 341 percent in the last fiscal year, he added.

Meanwhile, the government companies are failing to match the private ones in the competitive market. That is why Atlas Bangladesh, Eastern Cable, National Tubes, Shyampur Sugar, Zeal Bangla Sugar, and Usmania Glass incurred a loss. Of these companies, only Atlas Bangladesh, Eastern Cable, and National Tubes recommended dividends.

Although Renwick Jajneswar made profit, the company did not recommend dividend to the shareholders.

Usmania Glass' Company Secretary Shahadath Hossain said the glass sheets that the company produce do not have much market demand. Private companies are offering better glass sheets at a lower price, he elaborated.

Bangladesh Sugar and Food Industries Corporation's officials said it costs the government companies more than Tk100 to produce one-kilogram sugar. 

However, imported sugar is being sold at Tk60 per kg. To stay competitive the government companies are selling sugar at Tk70 per kg.