Most MNCs see negative growth

Babul Barman
Most of the listed multinational companies (MNCs) posted negative growth in their profits in the first half (half-1) in 2015 compared to same period last year as political turmoil in the first quarter hampered their production and sales.
According to the market operators, political unrest hit the businesses of multinational companies, especially during the first quarter in 2015.
Of the 13 listed multinational companies that account for 29 per cent of the total market capitalisation of Dhaka Stock Exchange (DSE), seven posted negative growth, four registered marginal profits while two are yet to publish their half yearly reports.
Grameenphone (GP), the country's top mobile operator's profit stood at Tk 10,477.01 million with earning per share (EPS) Tk 7.76 in the first half in 2015 against Tk 10,577.07 million and Tk 7.83 respectively for the same period last year, according to DSE data.
"GP's earning fell slightly due to muted turnover growth and higher cost of material and depreciation charge in Q2 and increased capital expenditure for 3G expansion," said LankaBangla Scurries, in a market analysis.
The profit of the British American Tobacco Bangladesh (BATBC) stood at Tk 2762.85 million with EPS Tk 46.05 against Tk 2,872.27 million and Tk 47.87 respectively in the corresponding period last year.
Reckitt Benckiser's profit stood at Tk 137.48 million in the first half of the current calendar year with EPS Tk 29.10 while it was Tk 85.92 million and Tk 18.18 respectively of the same period last year.
"The sales increased and margin expansion lead to the bottom-line growth of Reckitt Benckiser," said the LankaBangla Securities.
Lafarge Surma Cement has reported consolidated profits at Tk 1,347.19 million with EPS Tk 1.16 against Tk 1,405.26 million and Tk 1.21 respectively in the same period last year.
The Glaxo SmithKline's profits stood at Tk 371.43 million with EPS Tk 30.83 in the first half of 2015 against Tk 410.53 million and Tk 34.08 in the corresponding period a year ago.
"Glaxo SmithKline's performance was sluggish because their sales declined and profit margin shrank," said the LankaBangla analysis.
Md. Nizamuddin, deputy company secretary of Glaxo Smithkline, said their company's sales and profits declined as they are unable to promote products through 'unethical' practice.
He, however, expressed optimism that their profits would increase based on company's effort.
Bata Shoe reported Tk 275.38 million with EPS Tk 20.13 for the first half in 2015 against Tk 278.66 million and Tk 20.37 respectively for the same period last year.
"Bata Shoe's earning fell by 1.18 per cent due to sloth turnover growth following political instability in the first quarter and increase operational expenses," the LankaBangla Securities noted.
The profit of Heidelberg Cement stood at Tk 846.13 million and EPS Tk 14.97 against Tk 817.07 million and Tk 14.46 for the period last year.
Linde Bangladesh's profit stood at Tk 243.48 million and EPS Tk 16 in the first half in the current calendar year while it was Tk 294.95 million and Tk 19.38 in the same period last year.
"Operating expenses increased significantly (more than Tk 150 million), which affected net earnings," said the LankaBangla Securities.
Singer Bangladesh has reported Tk 73.63 million profits and EPS Tk 0.96 in the first half of 2015 against Tk 192.50 million and Tk 2.51 respectively in the same period last year.
Berger Paints consolidated profit for first half stood at Tk 807.44 million and EPS Tk 34.82 against Tk 624.01 million and EPS Tk 26.91 for the corresponding period last year.
"Berger Paints' earning increased backing on double digit sales growth as paint consumption was higher and increased margin due to lower cost of raw materials like solvents and pigments following oil price slump in the global market," said the analysis.

Marico Bangladesh's profit stood at Tk 454.23 million in the first quarter (April to June-2015) against Tk 466.83 million in the same period last year. Its half-yearly earnings report was not yet available.      
Fu-Wang Ceramic and Fu-Wang Food are yet to publish their earnings in the first half of 2015, as they considered June year endings.
Analysts, however, said brand reputation, better management and product quality helped the MNCs to attract prospective investors.
"The multinational companies are well-managed and have reputation about their product quality," said an analyst adding that the investors put their funds in those companies with the hope to get higher returns as their fundamentals are very strong.
The MNCs are declaring significant amounts of cash dividends every year after their listing with the local bourses.
Of the listed MNCs, the Reckitt Benckiser topped the list in terms of dividend declaration last year. It declared 550 per cent cash dividend for the year ended on December 31, 2014.
Marico Bangladesh declared 425 per cent cash dividend in 2014 followed by Glaxo SmithKline 420 per cent, Heidelberg Cement 380 per cent, Linde BD 310 per cent, Bata Shoe 280 per cent and BATBC, Berger Paints and Singer BD declared 220 per cent cash dividend each.
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