Babul Barman
Most of the listed multinational companies (MNCs) posted growth in profits in the first half of this calendar year on higher sales and lower production costs.
Analysts said brand reputation, better management and product quality helped the MNCs to increase the earnings.
Of the 13 listed MNCs that account for 27 per cent of the total market capitalisation of Dhaka Stock Exchange (DSE), the profit of Grameenphone (GP), the country's top mobile telephony operator, jumped sharply in the first half of the calendar year (CY) 2014 thanks to healthy revenue growth from 3G data services.
During the period, GP's net profit stood at over Tk 10.601 billion. It saw the steepest rise of 108 per cent, compared to other MNCs, from the corresponding period a year ago. The GP's net profit was over Tk 5.103 billion in the first half of 2013.
The profit of the British American Tobacco Bangladesh (BATBC) increased 39.20 per cent to Tk 2.872 billion in the first half of 2014 from that in the corresponding period of last year.
It was followed by Reckitt Benckiser that posted a profit of Tk 85.92 million. It was up by 36.03 per cent from that of the corresponding period of last year.
Lafarge Surma Cement came next in terms of the growth in profit. Its profit grew by 32.04 per cent to Tk 1.402 billion.
The Glaxo SmithKline's net profit stood at Tk 410.53 million in the first half of 2014 against Tk 346.47 million in the corresponding period of the previous year. The profit grew by 18.45 per cent.
Bata Shoe posted Tk 278.73 million in profit against Tk 243.37 million. The increase was 14.53 per cent.
Marico Bangladesh's profit rose by 11.84 per cent in the first quarter (April to June-2014). Its first quarter net profit stood at Tk 466.68 million against Tk 417.24 million in the same period last year. Its half-yearly earnings report was not yet available.
However, the profits of Heidelberg Cement, Singer Bangladesh and Linde BD declined by 5.29 per cent, 7.37 per cent and 14.09 per cent respectively in the first half of 2014 compared to the corresponding period of last year.
Fu-Wang Ceramic and Fu-Wang Food are yet to publish their earnings in the first half of 2014.
"The multinational companies are well-managed and have reputation about their product quality. So they made good profits," said Akter H Sannamat, managing director of the investment bank Union Capital.
He said investors put their funds in those companies with the hope to get higher returns as their fundamentals are very strong.
Three factors-brand value, profitability and prospects-drive up share prices of a company, he said. Share prices of those companies rose because of their corporate performance, not because of the economy, he added.
The MNCs are declaring significant amounts of cash dividends every year after their listing with the local bourses.
In the last few months also the stock prices of those companies rose substantially, as rising reserves and surplus funds and positive trends in dividend declaration attracted investors.
"Political calm and stable macroeconomic indicators also helped them earn good profits," said an analyst.
Of the top MNCs, the BATBC topped the list in terms of dividend declaration. It declared 620 per cent cash dividend for last year.
Bata Shoe declared 300 per cent cash dividend in 2013 while Berger Paints declared 220 per cent, Marico BD 200 per cent and GP 140 per cent.
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