FY20 profits of govt firms fall, except Submarine Cable’s

The profits of 81% of listed government companies declined in fiscal year 2019-20 due to the Covid-19 pandemic, except for two – Bangladesh Submarine Cable Company and Bangladesh Shipping Corporation.

Submarine Cable's profit increased by 63%, and Shipping Corporation's by 136.78%.

There are 19 listed government companies in the country. Of them, 11 were in profits and seven incurred losses in FY20, as revealed in an analysis of the audited financial statements of 18 listed companies of that fiscal year.

In the first half of the current fiscal year, Submarine Cable's profit rose by 93% due to the increase in the demand for internet. Its officials said the use of the internet had increased by about 25% during the pandemic.

On the other hand, the Shipping Corporation profited in FY20 but could not maintain that later. Its profit fell by 39.17% in the first half of this fiscal year.

In FY20, the net profit of state-owned listed companies was Tk1,536.12 crore, which was 16.46% less than the previous fiscal year's figure – Tk1,838.8 crore.

Apart from Submarine Cable and the Shipping Corporation, the listed government companies that made profits in FY20 are Investment Corporation of Bangladesh, Dhaka Electric Supply Company, Eastern Lubricants, Jamuna Oil, Meghna Petroleum, Padma Oil, Power Grid Company, Titas Gas and National Tubes.

On the other hand, companies that faced losses are Atlas Bangladesh,Bangladesh Services, Eastern Cables, Shyampur Sugar Mills, Usmania Glass Sheet Factory, Renwick Jajneswar, and Zeal Bangla Sugar Mills.

Among the state-owned companies, Titas Gas made the highest profit of Tk359.8 crore, which was 22.53% less than in the previous fiscal year. Shyampur Sugar Mills faced the highest loss of Tk60.69 crore.

The outbreak of coronavirus in March last year had a profound impact on businesses in the last quarter of FY20. Even though factories were closed due to the shutdown for 66 days in a row, the companies saw their earnings decline after meeting expenses.

Industries returned to production after the shutdown was lifted but the impacts of the pandemic still remain.

In the first half of FY21, the net profit of the state-owned companies was Tk724 crore, which was 3.47% less than that in the same period of the previous fiscal year. Only two companies, Submarine Cable and Jamuna Oil, saw an increase in profits during this period while the earnings of all others fell.

In the first half of the current financial year, Power Grid Company saw the highest profit of Tk179.17 crore, but the amount was 24% less than that in the same period of the previous fiscal year. Bangladesh Services saw the biggest loss of Tk50.06 crore.

Production at Shyampur Sugar Mills was closed last year due to losses. The company incurred losses of Tk60.69 crore in FY20 while losses in the first half of the current financial year amounted to Tk24.61 crore.

Another sugar producer, Zeal Bangla Sugar Mills, also faced losses. The amount of losses was Tk56.21 crore in the last financial year and Tk22.11 crore in the first half of FY21.

Usmania Glass Sheet Factory incurred a loss of Tk5.83 crore in the first half of the current financial year after facing huge losses in FY20.

Bangladesh Services, which operates in the travel and leisure sector, lost Tk4.62 crore in FY20.Its revenue continued to decline as the number of guests fell during the pandemic. In the first half of the current financial year, it lost Tk50.06 crore, which was 406.55% more than in the same period of the previous fiscal year.

An official of the company said the financial situation might improve if the pandemic situation became normal.

Investment Corporation of Bangladesh made a half-yearly profit of Tk62.09 crore in FY21.It lost Tk150.14 crore during the same period last year. Moreover, losses were Tk134.3 crore in the first quarter of FY20, and Tk15.83 crore in the second quarter.

Engineering companies facing losses

Three of the four state-owned companies in the engineering sector incurred losses in FY20.

Atlas Bangladesh manufactures different models of the world-renowned motorcycle brand Zongshen. In FY20, it lost Tk4.47 crore, which was 47% higher than in the previous fiscal year.

In the first half of FY21, its loss increased by 85%, reaching Tk4.85 crore,up from Tk2.61 crore in the same period of the previous fiscal year.

National Tubes, the country's first pipe manufacturing company, made a profit of Tk19 lakh in FY20.In FY19, it lost Tk50 lakh. It profited in the first quarter of the current financial year but faced losses in the second quarter.

After losing Tk17.05 crore in the last financial year, Eastern Cables lost Tk8.69 crore in the first six months of the current fiscal year. Losses increased by 9.86% in the first half of FY21 compared to the same period of the previous fiscal year.

Renwick Jajneswar manufactures essential parts for government sugar mills. It incurred losses of Tk17.05 crore in FY20 and Tk1.74 crore in the first six months of the current financial year. Losses increased by 606.77% in the first half of FY21 compared to the same period of the previous year.

All energy, power companies make profits

Seven government companies in the fuel and power sector made profits but their profits declineddue to the pandemic.

Although the pandemic situation has become somewhat normal, the companies in this sector were not able to overcome the coronavirus blows in the first six months of the current financial year.

At the end of the second quarter, the profits of only two companies increased compared to the same period of the previous fiscal year, while those of five companies declined.

In FY20, Dhaka Electric Supply Company's profit decreased by 57.61% to Tk45.56 crore. The previous fiscal year's profit was Tk107.48 crore.

Additionally, Jamuna Oil's profit declined by 14.43% to Tk200.19 crore, Meghna Petroleum's by 18.95% to Tk303.91 crore, Padma Oil's by 4.41% to Tk272.96 crore, Power Grid's 17.34% to 317.41 crore, Titas Gas' by 22.53% to Tk359.8 crore, and Eastern Lubricants' by 76.83% to Tk54 lakh.

Submarine Cable's profits almost double

People's online activities at home increased as coronavirus restricted outside movement, causing Submarine Cable's profit to almost double.

In FY20, the company's profit was Tk95.59 crore, which was 63.221% more than the previous financial year. The profit in the first half of FY21was Tk72 crore, which was 93.44% more than that in the same period of the previous fiscal year.

In the first quarter of the current fiscal year, the company's profits increased by 92.72% to Tk22.09 crore and by 94.21% to Tk38.94 crore in the second quarter.

Md Abdus Salam Khan, company secretary of Submarine Cable, told The Business Standard growth had been good during the pandemic and had been steady before that as well.

He said the pandemic had accelerated growth. 

"The demand for internet use is increasing and we will struggle to ensure services in the coming days. Growth is much better. Launching 5G will increase the demand for the internet. We are preparing for that now," he added. ***