During the first half of this year, most listed multinational companies (MNCs) posted impressive profit growth compared to the same period last year due to efficient management, strong brand value and product-price increases.
Despite pinching inflation affecting people's purchasing power, these companies performed well, with robust demand for their products driven by brand reputation and quality.
Asif Khan, chairman of EDGE Asset Management, said the multinational corporations are well-managed entities. Many of them successfully raised product prices in response to escalating raw material costs.
"That's why they were able to bag good profits for January-June this year," Mr Khan said.
With the prices of raw materials now declining in the global market, the business viability of these multinational companies has improved further, he added.
Thirteen multinational companies are listed on the Dhaka Stock Exchange (DSE) and they account for nearly a 16 per cent market cap of DSE.
In the first half (January-June) of this year, nine out of 11 companies experienced year-on-year earnings growth, ranging from 4 to 152 per cent.
Altogether, 11 companies reported a net profit exceeding Tk 36 billion in the first half through June, reflecting a 16 per cent increase from the previous year, according to their unaudited financial statements.
Besides, Marico and Berger Paints Bangladesh also posted profits in the first quarter for April-June, aligning with their financial year, which commences on April 1.
While consumer goods manufacturers witnessed steady demand for their products, companies in the construction sector and telecom operators reported higher revenues.
However, some firms like tiles maker RAK Ceramics and oxygen producer Linde Bangladesh experienced reduced profits due to energy price hikes and increased production costs.
On a positive note, Singer Bangladesh - a multinational electronic and home appliance maker - more than doubled its profits in the first half of the year. The company attributed its success to strategic marketing efforts, which boosted sales during two Eid festivals.
Singer has a strong presence in the appliances market and plans to accelerate its operations in the medium to long term.
Cement maker LafargeHolcim's profit surged 67 per cent to Tk 3.62 billion, thanks to increased sales of aggregates and a cement price hike.
"Diverse product portfolio, efficient marketing, digital footprint, strong distribution networks and the aggregates business played a significant role in ensuring a healthy growth momentum," said Iqbal Chowdhury, CEO of LafargeHolcim Bangladesh.
Industry insiders highlighted LafargeHolcim's unique edge as it relies on its own source of raw material - limestone, transported from mines in Meghalaya to its factory in Chhatak, Sylhet, through a conveyor belt.
This advantage enables the company to avoid freight charges and escape the volatility of the international raw material market - two major factors that impact the profitability of its competitors.
Heidelberg, another multinational cement maker marketing its product under the brand name Scan Cement, also staged a strong rebound in January-June this year, having endured losses during the same period last year.
The German-based cement manufacturer recorded a net profit of Tk 478 million in six months, compared to a loss of Tk 205 million a year before, supported by higher sales prices and lower production costs. A company official attributed Heidelberg Cement's recovery to the drop in raw material prices in the global market.
Grameenphone's profit grew at a rate of 14 per cent year-on-year to Tk 19.73 billion in the first half of this year, driven by a boost in data revenue.
"We prioritized meeting our customers' needs through digital-centric innovation and services," said CEO Yasir Azman.
Robi Axiata, the second-largest telecom operator in Bangladesh, also witnessed a significant jump in half-yearly profit, increasing 140 per cent year-on-year to Tk 664 million. This growth was driven by higher revenue and a significant reduction in foreign exchange losses.
Robi's half-yearly revenue rose 18 per cent to Tk 48.88 billion as the company continues its efforts to improve services and expand its customer base.
British American Tobacco (BAT) Bangladesh posted a 4 per cent growth in profit, reaching Tk 9.50 billion, while gross revenue surged by 14 per cent to Tk 212.30 billion in the first six months through June.
The impressive figures were driven by higher leaf exports and increased domestic cigarette sales. Leaf exports for the tobacco market leader more than doubled year on year, reaching Tk 2 billion, while domestic cigarette sales grew by 16 per cent to Tk 47.20 billion in January-June.
Bata Shoe also witnessed significant growth, with a 31 per cent increase in profit, totalling Tk 439 million in the six-month period. Sales saw a growth of more than 7 per cent, reaching Tk 5.66 billion during this period. The company attributed this growth mainly to efficient cost management.
Reckitt Benckiser (Bangladesh) PLC also posted a 25 per cent year-on-year growth in profit to Tk 299 million for the first half of 2023, thanks to higher operating profit and a significant increase in financial income.
The UK-based multinational company that sells popular consumer products also posted a 7 per cent sales growth to Tk 2.68 billion during the period.
Unilever Consumer Care's net profit grew 3.68 per cent year-on-year to Tk 366 million in the six months despite the consumer goods manufacturer's sales revenue falling 10 per cent to Tk 1.91 billion.
Despite the significant increases in raw and packing material costs, profit showed an improvement mainly due to efficiency in operating expenses, increased finance income as well as one-off benefit coming out of the assessment of past liabilities and obligations in the light of current business development, reads the company's earnings note.
Meanwhile, Linde Bangladesh experienced a sharp decline in half-yearly profit, falling more than 47 per cent year-on-year to Tk 280 million in January-June. The decline was primarily due to lower sales and the local currency's sharp devaluation against the US dollar.
Sales revenue dropped nearly 6 per cent year-on-year, amounting to Tk 2.37 billion in the six months, mainly due to reduced demand for medical oxygen, its main product, after the pandemic waned.
RAK Ceramics, the country's largest and renowned tiles and sanitary ware maker, also faced challenges, with profits dropping by 34 per cent to Tk 285 million in the first half. The decline was attributed to energy price hikes and increased production costs.
Asif Khan commented on the decline of the two multinational companies, suggesting that the hike in energy prices might have impacted their profits.
Marico Bangladesh posted a record quarterly profit in April-June this year as the India-based firm, whose financial year begins on April 1, registered a profit of Tk 1.33 billion, the highest quarterly profit so far since its listing on the stock exchanges 14 years back.
Berger Paints Bangladesh's net profit also grew 5.42 per cent year-on-year to Tk 972 million in the first quarter of April-June, thanks to the reduction of operating costs and a significant increase in finance income.
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