MNCs feel the bite of rising costs in Q2

Infographics: TBS

The country's listed multinational companies (MNCs) struggled to post strong profit growth in the second quarter (April-June) of 2025 as persistent inflationary pressure and an ongoing energy crisis continue to drive up the cost of doing business.

Of the 13 listed MNCs, seven companies reported a decline in revenue, while the remaining six managed to post growth.

In terms of profitability, six companies saw earnings increase, four recorded declines, and three reported losses during the period. Only two of these firms declared interim cash dividends for their shareholders.

The firms had already started the year on a weak note, reporting profit drops in the first quarter.

Market analysts say that while most MNCs failed to meet expectations, the second-quarter results show slight improvement compared to the first quarter, suggesting that they are gradually recovering from the economic challenges.

Among the 13 firms, 11 have followed the calendar years, where two firms followed the March-end fiscal year.

According to data compiled by TBS, Bata Shoe reported the steepest drop at around 40% in revenue, followed by BAT Bangladesh with a 23% fall. Grameenphone's revenue declined by 3%, Linde Bangladesh by 3%, Robi by 2%, Reckitt Benckiser by 1% and Heidelberg Materials saw a slight drop in revenue.

Marico recorded the highest revenue growth of 17% during the second quarter, followed by RAK Ceramics at 15%, LafargeHolcim at 5%, Singer Bangladesh at 3%, Unilever Consumer Care at 3%, and Berger Paints at 2%.

According to DSE data, 10 out of the 13 listed MNCs have released their financial statements for the January-March period.

Meanwhile, BAT Bangladesh reported the steepest drop at around 81% in profit, followed by Berger Paints with a 9% fall. Heidelberg Material's profit declined by 5% and Reckitt Benckiser by 1%.

Bata Shoe, Singer Bangladesh and RAK Ceramics posted losses in the second quarter.

Robi achieved the highest profit growth of 139%, which was followed by Unilever Consumer Care at 28%, LafargeHolcim at 20%, Marico at 13%, Linde Bangladesh at 6% and Grameenphone at 2%.

Among them, Marico has decided to pay a 600% cash dividend and Grameenphone a 110% cash dividend as an interim dividend to their shareholders, considering the quarterly financial performances.

Following the first two quarters' financial performances, at the end of the first half of this year, BAT Bangladesh, Grameenphone, Heidelberg Materials, RAK Ceramics, Robi, Lined Bangladesh and Bata Shoe's revenue dropped, while LafargeHolcim, Reckitt Benckiser, Singer and Unilever Consumer Care's revenue rose.

Meanwhile, during the first half of this year, Bata Shoe, BAT Bangladesh, Grameenphone, Heidelberg Materials, LafargeHolcim, Reckitt Benckiser, Linde Bangladesh and Unilever Consumer's profits fell, while only Robi saw profit jump.

RAK Ceramics and Singer incurred losses in the first half of this year.

MNCs have long played a vital role in the stock market due to their resilient performance and consistent, attractive dividend payouts. As a result, investors prefer to hold these stocks in their portfolios and continue to call for more MNCs to be listed, according to market insiders.

Currently, MNCs have a total market capitalisation of Tk1.07 lakh crore, representing around 15% of the Dhaka bourse's total market cap.

Grameenphone, a mobile operator, recorded a 31% decline in net profit to Tk1,513 crore during the first half.

Yasir Azman, chief executive officer of Grameenphone, said in a press release, "We have been navigating a challenging economic downturn since the second half of last year that has put significant pressure on businesses across sectors, including telecom."

BAT Bangladesh reported that its profit dropped by 55% to Tk415 crore in the January-June period.

The cigarette producer attributed the sharp decline in revenue and profit to persistent inflationary pressures and the temporary shutdown of its Dhaka factory.

Linde Bangladesh saw its profit decline by 5% to Tk18.75 crore in the first half.

The gas producer in its statement noted that profit declined mainly for the lower sales and higher costs due to inadequate natural gas supply and power disruptions at its Rupganj plant.

In the first half of this year, Bata Shoe's net profit dropped by 27% to Tk27.18 crore. The company in its statement reported that revenue and profit have been impacted by exceptional circumstances.

Several retail locations were affected by acts of vandalism, which disrupted operations and had a material impact on financial performance, it added.

These events, while unprecedented, highlighted the company's resilience and the strength of its stakeholder relationships, Bata said.

Singer Bangladesh said selling prices were not adjusted to absorb higher product costs, leading to margin erosion as the company aimed to remain competitive. Increased discounts, offers, and promotions raised costs further, while the product mix and sales channels also negatively impacted margins.

Robi posted a significant growth in net profit to Tk382.89 crore in H1 of 2025.

Robi Acting CEO and Chief Financial Officer Riyaaz Rasheed said in a press release, "We are highly encouraged to see Robi bouncing back to winning ways at the end of June."

Cost efficiency drive continues to gain momentum with application of new homegrown digital solutions, he added.

Rasheed, however, cautioned that the growing concentration of market power will undermine the opportunities the telecom reform is expected to unlock.

He urged the telecom regulator to address this longstanding problem for equitable growth in the industry.

Iqbal Chowdhury, chief executive officer of LafargeHolcim Bangladesh, said in a press release that they achieved solid volume growth in cement and aggregates, driven by strong market demand and growing customer confidence.

The CEO further said the profitability was impacted by rising energy costs and falling cement prices, prompting cost-efficiency measures and strategic pricing reviews.

Despite the current challenges, the company remains optimistic about improved performance in the upcoming quarters, he added.