Most listed manufacturers record losses on high interest, weak demand

Highlights:

• Manufacturing profits rose slightly despite widespread sector declines
• Pharmaceuticals and power sectors drove overall profit growth
• Finance costs surged, squeezing margins across most industries
• Cement, ceramics shifted from profits into significant losses
• Only four firms exceeded Tk1,000 crore profit in 2025
• High interest rates, weak demand, geopolitical tensions hurt outlook

Manufacturing firms posted a modest growth in net profits last year, yet most of the sectors, including paper, tannery and cement faced massive declines due to soaring cost of finance and slowing demand, according to an analysis of listed firms.

Data from DSE-listed companies show aggregate profits edged up to Tk14,385 crore in 2025, driven mainly by the companies in pharmaceutical and power sectors.

Sector-wise data show that 27 companies in the pharmaceutical sector posted a combined profit of Tk4,058 crore in 2025, though down 2% from the previous year.

In the service sector, telecommunications recorded a total profit of Tk4,089 crore, marking a 20% decline year-on-year.

In contrast, profits in the power and energy sector surged by 193% to Tk2,836 crore, up from just Tk967 crore in 2024. That year, state-owned companies – Titas, Power Grid, and Desco – incurred significant losses due to the depreciation of the local currency.

Infograph: TBS

Meanwhile, the engineering sector reported profits of Tk2,056 crore, reflecting an 11% increase compared to the previous year.

Overall, listed manufacturing firms posted a modest 3.9% rise in net profits in 2025, while net profits declined across most sectors, with paper and printing, ceramics, tannery, and cement posting triple-digit drops. The country's key textile sector's profit dipped by 23%.

This uneven and fragile recovery across sectors was revealed in the analysis by Lion City Advisory, a financial advisory services provider.

Based on published financial statements, the firm analysed revenue, profitability, and finance cost of 155 listed companies, excluding financial sector firms. It followed calendar year basis figures.

The report showed revenue of the firms increased 4.6% to over Tk2 lakh crore, while finance costs rose 12.7%.

Only 4 makes over Tk1,000cr profit

According to Lion City, only four companies posted profits above Tk1,000 crore in 2025.

Among them, multinational company Grameenphone led with Tk2,908 crore, followed by Square Pharmaceuticals at Tk2,594 crore, United Power Generation at Tk1,097 crore and Walton at Tk1,095 crore. Robi reported a profit of Tk937 crore.

On the loss side, Bashundhara Paper Mills topped the list with a loss of Tk477 crore. Titas Gas followed with Tk450 crore, while Energypac posted a loss of Tk213 crore.

In 2024, four firms also crossed the Tk1,000 crore profit mark, again led by Grameenphone at Tk3,630 crore, followed by Square, Walton and United Power Generation.

Titas Gas was the biggest loss-maker in 2024 with Tk1,502 crore in losses. Power Grid and Desco ranked next with losses of Tk449 crore and Tk316 crore, respectively.

 Slipping into losses

Finance costs surged amid high policy rates, with the Paper and Printing sector recording a 55% increase, and telecom, cement, tannery, ceramics, and food and allied sectors also recorded double-digit growth in finance costs.

Several sectors slipped from profit into losses, pointing to mounting cost pressures, weak demand and rising financing burdens weighing on much of the manufacturing base.

For instance, the cement and ceramics sectors slipped from a profit position in 2024 into losses in 2025, reflecting a sharp deterioration in operating conditions.

Industry insiders said the downturn was due to higher input costs, weak construction demand and elevated interest rates. Firms with stronger balance sheets and tighter cost control managed better, while capital-intensive businesses struggled to remain profitable.

With interest rates still high, borrowing-heavy companies have seen margins squeezed even where revenues held steady. Currency volatility has further raised import costs, eroding profitability, they said.

'2025 proved to be a challenging year'

Abdullah Al Faisal, director at Lion City Advisory, said 2025 was a challenging year for businesses amid high interest rates, weak demand and political uncertainty.

"Despite a 12.7% rise in finance costs, companies showed resilience, particularly in pharmaceuticals and power, with 4.6% revenue growth and 3.9% net profit growth," he said. "However, momentum weakened in Q4, with revenue down 2% quarter-on-quarter and net profit falling 10%."

He added that post-election optimism briefly raised hopes of normalisation, but that has faded amid fresh headwinds from escalating US-Iran tensions.

"The near-term outlook remains cautious, with firms prioritising cost control, liquidity management and resilience over expansion," he said.

'War will impact profits further'

Riad Mahmud, president of the Bangladesh Association of Publicly Listed Companies (BAPLC), said listed firms broadly fell short of expected performance in 2025.

He said pharmaceuticals performed well, but development-linked sectors such as cement and steel lagged due to a reduced development budget during the interim period.

Higher raw material costs and rising interest rates further squeezed profitability, he said, adding that elevated interest rates pushed up financing costs, adding to corporate pressures.

"After the new government took office, conditions were expected to improve from March. But the Iran war has driven up raw material prices, disrupted supply chains, increased transport costs and delayed shipments," he said.

Mahmud said uncertainty persists despite talk of de-escalation. "Unless the conflict is resolved, economic conditions will not improve and import costs will keep rising," he said.

He warned profits could remain under pressure this year. Petrochemical firms and Middle East-dependent industries are already feeling the impact, with shipment delays, higher prices and raw material shortages disrupting production.

 'Rising raw material prices, interest reduced profitability for cement

Amirul Haque, president of the Bangladesh Cement Manufacturers Association (BCMA), said the cement sector underperformed in 2025 due to a reduced development budget and stalled megaprojects, with steel facing similar pressures.

He said rising raw material costs have further eroded margins. "After the election, the economy began to recover. But large projects remain slow and cement demand has not fallen from previous levels," he said.

He added that higher interest rates have significantly increased costs. "Lending rates have risen from around 9% to 14-15%, making it difficult to achieve expected profits. Tax-related complexities are also adding pressure," he said.

A previous TBS report showed the cement industry is facing one of its worst downturns, with excess capacity, rising financing costs and weakening demand squeezing producers.

Most plants are operating below 30% capacity, far under the global benchmark of 70–80%, leaving the market oversupplied and prices under pressure.

Over the past decade, investors poured more than Tk45,000 crore into expansion, driven by expectations of megaprojects, housing growth and economic zone development. Capacity has now reached around 100 million tonnes annually, nearly four times a decade ago.

However, demand has lagged. Consumption stood at 3.8 crore tonnes in 2024, below 40% of capacity, and has weakened further this year, forcing output cuts and job losses.

The cement sector had Tk139 crore in 2024, which turned into almost Tk14 crore loss in 2025. Similarly, the ceramics sector turned Tk23 crore profit to Tk18.5 crore loss.