Meghna Petroleum posts record profit riding on high interest income

Meghna Petroleum, the state-owned oil company, has reported a record profit for the 2023-24 fiscal year, driven by a 22% increase in profits, largely fueled by non-operating income from fixed deposits.

The company posted a profit of Tk542.29 crore, up from Tk442.14 crore in the previous fiscal year.

In light of the strong financial performance, Meghna Petroleum has declared a 170% cash dividend, the highest since the 2007-08 fiscal year, according to data from the Dhaka Stock Exchange (DSE).

Shareholders will receive Tk17 for each share, compared to the 160% cash dividend paid out in the previous year.

Earnings per share (EPS) rose to Tk50.11, up from Tk40.86 in FY23.

According to its reports, at the end of June 2024, it owns Tk1,212 crore short-term investment as fixed deposits receipt (FDR) in banks.

An official said, basically the company's profit grew as interest rate on FRDs increased. Also, fuel distribution charges increased this year, which helped marking decent profit for FY24.

In March this year, the government raised the margin on fuel sales by 60% for the three state-owned oil marketing companies – Jamuna Oil, Meghna Petroleum and Padma Oil.

The margin on diesel and kerosene sale increased to Tk0.80 per litre from Tk0.50 commission fixed in 2016, while the octane and petrol margins have been raised to Tk0.90 from Tk0.60 per litre.

About a year ago, the Bangladesh Petroleum Corporation (BPC) proposed increasing the margins, citing a decline in incomes of the state-run entities. 

Its net asset value (NAV) increased to Tk2,533 crore for FY24, which was Tk2,164 crore in the previous fiscal year.

However, its net operating cash flow per share turned to a negative at Tk46.17, which was positive at Tk100.07 in the previous fiscal year.

The annual general meeting is scheduled for 1 February 2025, and the record date to identify shareholders has been set for 15 December.

The activities of the company comprises the procurement, storage and marketing of petroleum products and lubricants, bitumen, LPG and battery water in Bangladesh.

Profit grows by 51% in Jul-Sep

The profit growth for Meghna Petroleum continued in the first quarter of the current fiscal year as it posted a 51% growth in its profit.

In the profit during the July to September quarter, its profit grew to Tk137 crore fueled by its non-operating income, up from Tk91 crore in the same time of the previous fiscal year.

It made an income of Tk147 crore from its FDRs in Q1, which was Tk99 crore during the same time of the previous fiscal year.

Also, its gross earnings on petroleum products handled in Q1 of FY25 increased by 13% to Tk67.15 crore over the same time of FY24.

In an explanation, the company said its EPS has increased by 51.19% due to increase in sales margin and increase in other operating income.