Market competition, weak industrial demand hit MJL Bangladesh's quarterly earnings

Infographic: TBS

MJL Bangladesh PLC, the country's leading lubricant and energy company, reported a notable decline in its consolidated business performance for the July-September quarter of FY2025-26, as revenues of subsidiary companies were affected by market competition and sluggish domestic demand for lubricants in power plants and the industrial sector.

Officials said subsidiary revenues were hit by intense LPG market competition, driven by questionable sourcing practices and resulting in price discrepancies with other market players.

According to the company's latest financial disclosures, consolidated revenue fell by 21% year-on-year to Tk989 crore, while net profit dropped by 15% to Tk96 crore during the quarter. Earnings per share stood at Tk3.06, compared to Tk3.43 in the same period a year ago.

The consolidated figures include the performance of MJL Bangladesh's subsidiaries – Omera Petroleum Limited and Omera Cylinders Limited – as well as its Singapore-based associate company, MJL (S) Pte Limited, which trades petroleum and related products in international markets.

At the parent company level, MJL Bangladesh's lubricant and oil tanker operations remained relatively steady. Its standalone revenue increased by 1% to Tk337 crore, while net profit dipped slightly by 2% to Tk97.42 crore. The earnings per share of the standalone business came in at Tk3.08, down from Tk3.13 in the same quarter of the previous year.

Md Zamiur Rahman, chief financial officer (CFO) of MJL Bangladesh, told TBS that the revenue of subsidiary companies was impacted due to a significant price competition in the LPG sector, largely influenced by challenges related to certain questionable sourcing practices. This situation is leading to noticeable price discrepancies between our subsidiaries and other operators in the market. 

"However, we remain optimistic as domestic demand for LPG continues to grow," he said.

On the lubricant side of the business, Zamiur Rahman said the company has managed to maintain reasonably steady performance amid turbulent macro-economic conditions. 

"The demand for lubricants in power plants declined as several plants remain closed. Moreover, gas shortages and broader macroeconomic constraints have led many factories to reduce or suspend operations, which in turn reduced lubricant consumption," he said. 

"Despite these challenges, our lubricant segment still managed to post profit growth, which reflects our strong brand and operational resilience," said the CFO.

In the stock market, MJL Bangladesh's shares closed 1.95% lower at Tk90.60 on Tuesday, with a total market capitalisation of Tk2,870 crore on the Dhaka Stock Exchange.

Earlier, the company's board of directors declared a 52% cash dividend for the fiscal year 2024–25. For that year, the consolidated earnings per share surged 30% to Tk11.36. 

The annual general meeting is scheduled for 22 December, and the record date for shareholders has been set for 17 November.

MJL Bangladesh PLC, formerly known as Mobil Jamuna Lubricants Limited, was incorporated on 3 December 1998 and began commercial operations in May 1999. 

It is jointly owned by EC Securities Limited, a concern of the East Coast Group, which holds 52.06% of shares, and the state-owned Jamuna Oil Company, which owns 19.45%.