Shown companies sprint to pre-Covid profit level
Combined profit of a lot of the detailed companies surpassed the pre-Covid level on October-December quarter, pointing to an easy rebound in business and economic activities.
An analysis of 185 listed companies representing pharmaceuticals, energy and power, textile and apparel, IT and telecom, steel, cement, ceramic, automotive, leather, food and consumer goods showed that the mixed profits rose 26 % year-on-year to Tk 3,758 crore in the last quarter of 2020.
The cumulative profit was Tk 3,252 crore in the July-September period as a result of a pickup running a business and consumer confidence, thanks to the reopening of the economy carrying out a rigid nationwide shutdown in April and May.
Ordinary quarterly profit of the stated companies was Tk 2,882 crore on the five quarters to March.
It dropped 34 per cent year-on-year to Tk 1,655 crore found in the April to June period due to demand hit rock bottom following the health crisis wiped out millions of careers and created yet another 20 per cent new poor found in Bangladesh.
"The economy depends upon how companies fare. Thus, their profits do indicate the economy's trend," said Belly Mirza Azizul Islam, a ex - chairman of the Bangladesh Securities and Exchange Commission.
"The rebound in income is a positive expansion for the economy."
The analyst said the listed companies were a significant part of an economy, so the info reflects that the economy is building a turnaround. The agriculture sector can be successful, he said.
The Daily Superstar took into account 185 out of 331 listed companies as many companies are yet to create the financial reviews for the October to December period. Newly stated businesses were also excluded.
Of the firms, the performance of 151 organizations improved in the last quarter compared to the pre-pandemic period.
Islam gave credit to the government's timely initiative to aid the economy since it has already established contributed to lifting domestic demand.
The federal government rolled out 21 stimulus packages involving a lot more than Tk 121,000 crore since March, when the federal government announced the maiden cases of coronavirus infections and subsequently a nationwide lockdown for just two a few months to tame the virus.
The packages have been provided in the sort of low-cost loans to micro, tiny, medium and large industries and services, foodstuff security, social cover and particular allowances as the pandemic-induced shutdown paralysed the market.
Azam J Chowdhury, president of the Bangladesh Association of Publicly Listed Corporations (BAPLC), said pharmaceutical, strength and commodity sectors were not influenced by the pandemic.
Earnings for the listed companies fell around 30 % on an average through the pandemic.
The gains of the listed medicine makers dropped 24 per cent to Tk 510 crore in the April-June period. It sprinted to Tk 846 crore within the last one fourth of 2020, way greater than the pre-Covid level.
The fuel and power sector built a profit of Tk 933 crore within the last quarter, up from Tk 702 crore in April-June.
Chowdhury's business Mobil Jamuna's revenue rose when compared to pre-pandemic level.
Not absolutely all listed companies are in the same position.
"Some 're going down and they haven't any growth no strategic plans," said Chowdhury.
Among all the key sectors, the textile and engineering sectors were the hardest hit as demand collapsed. Both sectors witnessed losses in the April-June period.
The rest of the sectors made profit regardless of the pandemic although the profit was not as high as it was during the past.
The textile sector incurred a lack of Tk 223 crore in the April-June quarter. It logged a profit of Tk 93 crore within the last one fourth of 2020, way lower than the pre-Covid level.
The engineering sector posted a lack of Tk 48 crore in April-June. Its earnings stood at Tk 358 crore in the October to December period.
Some 95 businesses incurred losses in April to June. The quantity of loss-making businesses came right down to 32 in the fourth quarter of this past year, data showed.
"As business was shut completely for just two months found in the April-June quarter, the profit collapsed in the time," said Shahidul Islam, ceo of VIPB Asset Supervision Business, which manages mutual cash and institutional funds well worth around Tk 650 crore.
The profit went up in the last quarter as demand rose, Islam said.
"There are a few expenditures that you can't defer even during the shutdown of an market."
"As the garment industry is mostly linked with the international industry and our export destinations witnessed repeated lockdowns, the effect on the sector was devastating," said Anwar-ul Alam Chowdhury, a past president of the Bangladesh Garment Companies and Exporters Association.
"When additional sectors bounced rear, the next wave barred the garment sector from building a comeback as we count on exports," he said.
International buyers had put orders but they either cancelled them or hook them up to hold as the pandemic raged, reported the chairman of Evince Textiles.
"Until the demand in the international market accumulates, the effectiveness of the garment sector will not improve much."
In July-December, earnings from apparel shipment, which accounts for more than 80 % of countrywide exports, declined 2.99 % to $15.54 billion, info from the Export Advertising Bureau showed.
"We also discovered that the profit of firms was severely impacted found in April to June," stated Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem).
"The economy is recovering however the process is slow."
Arif Khan, CEO and managing director of IDLC Financing, said overall activities accelerated.
The mortgage recovery rate of the non-bank financial institution recovered to 90 % from 35 % in April.
