Business up for MNCs, but not like last year

Business for most listed multinational companies (MNCs) has bounced back in the July-September period compared to what was during the April-May lockdown, which aimed at curbing the spread of the novel coronavirus.

However, the development has been low when a year-on-year analysis is carried out.

On the bright side, in context to the preceding quarter of April to June, all 11 of the listed companies operating in Bangladesh witnessed higher sales and earnings.

The government announced a general leave from March 26, which was extended to May 30. Afterwards it decided to reopen the economy and subsequently, companies started to reopen their operations.

Of the listed 11 multinational companies, five witnessed lower sales in the last July-September quarter compared to that in the same period the previous year.

For three it was higher whereas the rest are yet to publish their quarterly financial reports.

"The pandemic hit the overall business community of the country along with ours," said a top official of a listed multinational company preferring anonymity.

The biggest hit came in the April-June quarter, but businesses have bounced back in the July-September period, he said.

"There is still scope for a revival which will take some more time."

According to the Dhaka Stock Exchange data, sales revenue of British American Tobacco Bangladesh, Bata Shoe Company (Bangladesh), Linde Bangladesh, HeidelbergCement Bangladesh and Grameenphone dropped year-on-year in the July-September quarter.

Meanwhile, sales of Singer Bangladesh, Marico Bangladesh and LafargeHolcim Bangladesh have soared.

"Our efforts on health, cost and cash have ensured that we stay focused during the crisis, while our fast progress on digital helped us become effective in the marketplace," said Rajesh Kumar Surana, CEO and country representative for LafargeHolcim Bangladesh.

LafargeHolcim's net sales increased 3 per cent to Tk 365 crore while profits rose 71 per cent to Tk 65 crore on the back of internal efficiencies.

Despite disruptions emanating from Covid-19, Bangladesh, with its strong record of growth and sound economic policies, will make a rebound on its growth trajectory, said Surana.

The recent stimulus packages introduced by the government coupled with improvements in inward remittance will aid the resurgence of rural demand, he added.

Marico's results are driven by its consistent efforts behind creating world-class products for Bangladesh consumers, said Marico Bangladesh Managing Director Ashish Goupal in a recent interview.

"While adapting to new ways of working and a digital existence, we made every effort to retain this consistency," he said.

However, there were intermittent supply chain disruptions across locations due to lockdowns, he admitted.

"De-modelling our distribution and sales network and putting in place stringent health and safety measures across locations helped ensure business continuity," he said.

On the other hand, Marico launched new products in the health and hygiene segment including a hand sanitiser, a hand wash and a vegetable wash, Goupal added.

It will take another two years for the economy to return to the pace of normalcy which was prevailing before the pandemic, said a top marketer of another listed company requesting to remain unnamed.

Whatever was sold once the general leave was lifted and the economy reopened emanated from demand which had been put on hold for the pandemic, he said.

But many people are adapting their demands to the present status of their income and it forced them to reduce expenditures, he said, adding that thereby, sales would remain slow in the upcoming two or three quarters.

So, how the economy has rebounded or been impacted will be clear in the next two quarters, the official added.

A top official of an asset management company said the Bangladesh economy has been making a rebound but it was still on the path towards reaching its normal pace.

For local companies, the revenue and profits scenario are the same as that of the multinational companies, he added.