Meghna Petroleum posts profit growth despite a revenue decline

Despite a marginal drop in its sales, Meghna Petroleum Ltd posted higher year-on-year profits in the October-December quarter of the current fiscal year - thanks to its control over costs, and higher income from investments.

The company's Managing Director Mir Saifullah-Al-Khaled told The Business Standard, "Operational income dropped due to a big drop in furnace oil sales, and no revenue from the business with local fractionation plants."

Meghna Petroleum's furnace oil supply to the power plants dropped by 40,000 tons year-on-year in the October-December quarter as the private sector power plants were importing the fuel themselves in 2021.

As Meghna alone was importing and supplying 40% of the furnace oil in 2020, the drop hurt its revenue the most, he said.

Meghna also lost some revenue because the private sector fractionation plants - which produce gasoline and kerosene out of condensate and sell them back to either Meghna or its competitors Jamuna Oil and Padma Oil - were off-operations due to regulatory decisions in the October-December period of 2021.

Its managing director expects the business with fractionation plants will resume sooner, while he does not hope much that private sector power plants would buy much furnace oil from them unless there is any regulatory obligation.

Its petroleum products sales dropped to Tk56.23 crore in the October-December quarter from that of Tk59.06 in the same quarter a year ago.

However, the state-owned fuel distributor successfully reduced its administrative, selling and distribution, and financial expenses that helped post Tk30.83 crore in operational profits, up from Tk28.58 crore in the same quarter of 2020.

Also, its non-operating income, mainly the income from its over Tk1,800 crore investments in fixed deposits and other securities, increased to over Tk65 crore from Tk58.3 crore.

Its net profit after taxes for the last three months of 2021 increased to Tk70.4 crore from Tk61.7 crore a year ago.  

Quarterly earnings per share (EPS) increased to Tk6.51 from Tk5.7 a year ago.

For the first half of the fiscal year (July-December) Meghna Petroleum posted Tk12.74 in EPS, which was Tk12.24 a year ago.

Net asset value per share of the company stood at Tk172.64 at the end of December.

Meghna Petroleum shares closed 0.1% lower at Tk208.5 each on Sunday at the Dhaka Stock Exchange.