Listed state fuel oil firms record robust profits, others struggle

Infographics: TBS

The state-owned fuel oil firms, listed on the capital market and enjoying business monopolies, recorded robust profits in the July-March period of the current fiscal year, while those in competitive sectors grappled with challenges.

A total of 19 government entities are listed on local stock exchanges, and 17 of them have published their financial statements for the first three quarters of the FY24. Among them, eight posted profits, while nine incurred losses.

BD Services is yet to release its financials, while Rupali Bank, the sole entity from this sector to be traded publicly, adhered to a December-ending financial year.

During the period, Meghna Petroleum, Padma Oil, Jamuna Oil, and Power Grid managed to sustain their profit growth.

The profit growth of the three oil companies was primarily propelled by interest income, as they maintain substantial amounts of FDRs in banks. Additionally, the government's decision to raise their selling margin contributed to further enhancing their profitability.

In its financial statement, Padma Oil reported that the increase in profit was attributed to a rise in non-operating income, particularly from interest on deposits, along with an uptick in sales margin compared to the corresponding periods of the previous year.

The Power Grid Company of Bangladesh is experiencing consistent growth in its quarterly profits, driven by rising revenue and favourable foreign exchange rates. But the company incurred losses in the previous year at the same time.

Jahangir Azad, company secretary of Power Grid, told The Business Standard that the company strategically secured loans in various currencies from different international financial organisations. In the third quarter, foreign exchange rate volatility decreased, especially with a stable dollar rate and a drop in the Euro rate.

He added that forex rates gradually declined from July to March of this fiscal year, resulting in significant savings for the company as it had to pay less against these currencies.

But Dhaka Electric Supply Company Limited (Desco) and Titas Gas suffered losses in the July-March period.

Desco officials said the cost of buying electricity has increased due to the increase in bulk prices. That is why it has plunged into losses, as the retail price has not increased at the same pace.

He said the bulk price has increased by 28% in two phases, but the retail tariffs have not increased accordingly. 

Arpana Islam, general manager (finance) at Titas Gas, told TBS earlier that the company incurred losses due to two factors – the government's decision to withdraw the 2% system loss facility and the increase in operating expenses.

The other companies – including Zeal Bangla Sugar, Shyampur Sugar, Altas Bangladesh, Investment Corporation of Bangladesh, and Usmania Glass, incurred losses mainly due to a lack of good governance and inadequate policy, according to insiders.

On 9 April, Prime Minister Sheikh Hasina, during an Ecnec meeting, ordered the Finance Division to work on the capital market listing of state-owned enterprises. 

Planning Minister Abdus Salam said public listing would help increase the competitiveness of government firms for competing with private companies.

He also mentioned that by going public, firms would control their costs