State-run fuel suppliers’ earnings drop on Q1
Earnings of state-run gasoline supplying companies dropped found in the July-September period due to a sharp fall found in income from bank deposits and in gas product sales amid the Covid-19 outbreak.
Padma Oil's revenue fell 14.5 % year-on-year to Tk 62.89 crore in the first quarter of fiscal 2020-21.
Meghna Petroleum's earnings plummeted 13.4 per cent to Tk 70.78 crore and that of Jamuna Oil 12.5 % to Tk 44.9 crore.
All three companies employed to truly have a handsome sum as lender deposit and the interest incomes are their key source of earnings.
By the first one fourth of FY21, Meghna had Tk 1,189.35 crore as fixed deposits and Padma Tk 140.35 crore while Jamuna had Tk 1,445 crore as short-term investment in fixed deposit by June 30 in 2019.
"Of the drop found in earnings, around 20 % was due to the pandemic induced slower economy as the major blow came from the falling interest income from April," stated Md Masudul Islam, provider secretary of Jamuna Essential oil.
Scheduled banks pulled downward the interest for deposits to solitary digits following an purchase of the banking regulator to supply 6 % interest in deposits and 9 per cent on lending since April 1.
The net interest income of Meghna is 15 per cent higher than what the business earns from petroleum sales, according to company officials.
Meghna's earnings from interest dropped 19.2 per cent year-on-year to Tk 66.14 crore in the first one fourth of 2020-21 and the pattern was the same for Padma and Jamuna.
Banks offer higher deposit costs to state-owned oil businesses because they keep their money in banks for an extended period, said a high official of a good listed oil distributor preferring anonymity.
State banks currently offer the fuel suppliers over 6 % interest on deposits as the private banks 7 %, which is much decrease from what the firms used to get previous, the official said.
"It is somewhat weird to get the central lender to create strain on the banks to lower the rate further when we are trying to make best make use of our funds, produce more earnings and disburse larger dividends."
The impact will be clear in the next quarter, he added.
