Linde Bangladesh profit drops over 74% in 2023

Linde Bangladesh Limited — a listed multinational gas producer — witnessed a 74% drop in profit in 2023 as inflation spiked business costs, narrowing the profit margin, according to the company's financial statement.

The company approved the audited financial statement at a board meeting held on Thursday.

As per the discloser, Linde Bangladesh's net profit last year stood at Tk22.85 crore, significantly down from Tk88.32 crore in the previous year.

At the end of the last year, its earnings per share was Tk15.02.

Meanwhile, the company also disclosed March ending quarterly financial statement for 2024 on Thursday board meeting.

As per its statement, the net profit of the company rose by 42% to Tk9 crore in the January-March quarter this year against the previous year at the same time.

Linde Bangladesh stated in its financial statement that profit increased mainly due to higher sales and a higher gross margin, which were partially offset by higher operating expenses.

During the quarter, its revenue rose by 16% to reach Tk58.66 crore compared to the previous year at the same time.

Earlier, on 19 June, the company proposed to pay 1,540% interim cash dividends based on its January to October financials for 2023.

Shareholders are supposed to get Tk234 crore as interim dividends, and 9 July has been set as the record date for the entitlement of dividends. 

According to its disclosure, Linde Bangladesh recommended the highest dividends in its history.

In May this year, Linde Bangladesh in its disclosure informed that it is going to sell its major revenue-generating segment — the welding electrodes business — to the American-Swedish industrial company ESAB Group.

That is why, the company is prioritising shareholders' returns over profitability so that buyers do not lose interest in its share, says stock market insiders.

Following announcement of the interim dividends, Linde's share price jumped Tk442.1 each or 43.04% to close at Tk1409.40 each at the Dhaka Stock Exchange (DSE).

At the end of Thursday trading session, its share closed at Tk1,286.50.

Demerger and selling of welding business

In October last year, Linde Bangladesh secured the High Court order for demerge of its hard goods business from a wholly owned subsidiary Linde Industries Pvt Ltd.

The demerger is part of Linde's strategy to create more focus on its gas business, according to a company official.

Now, the company is going to sell the welding electrodes business to ESAB Group.

On 28 May, the board of Linde Bangladesh approved the share sale and purchase agreement with ESAB Group. 

The agreement involves selling the electrode segment operated by Linde Industries Private Limited.

The company will sell 13.82 crore shares of Linde Industries to the ESAB Group, according to the disclosure.

According to the ESAB website, it is a world leader in welding and cutting equipment and consumables, with business operations in 140 countries and 26 manufacturing hubs across the globe.

Linde Bangladesh was incorporated in 1973 and listed on the DSE in 1976.