Most listed state-owned entities report losses in FY24

Infographic: TBS

Most listed state-owned firms incurred losses in fiscal year 2023-24, largely due to insufficient government policy support, which disrupted a previously favourable business environment for these entities.

According to the Dhaka Stock Exchange (DSE), 17 state-run firms are listed on the bourse, with 11 having disclosed their financial results for the last fiscal year. Of these, six reported losses, while five posted profits.

Among the loss-making firms, once-prominent entities like Dhaka Electric Supply Company (Desco) and Titas Gas Transmission and Distribution Company reported substantial losses in the last fiscal year, marking their second consecutive year of losses. The remaining loss-making firms—Zeal Bangla Sugar, Shyampur Sugar, Usmania Glass, and Renwick Jajneswar—have faced ongoing losses for years due to limited competitiveness in the market.

Meanwhile, Padma Oil and Bangladesh Shipping Corporation posted record profits in their history during the last fiscal year. Other firms, including Bangladesh Submarine Cable, National Tubes, and Eastern Lubricants, also performed well, with National Tubes showing particularly strong results.

Of the 11 government-owned firms, six have declared dividends for the last fiscal year, with a total cash payout of approximately Tk302.50 crore.

Padma Oil declared the highest cash dividend of the year, offering a 140% payout to its shareholders. Eastern Lubricants followed with an 80% cash dividend and a 10% stock dividend. Bangladesh Submarine Cable declared a 40% cash dividend, Bangladesh Shipping Corporation a 25% cash dividend, Titas Gas a 5% cash dividend, and National Tubes a 4% cash dividend.

Titas and Desco suffer big losses

Titas Gas reported a loss of Tk744 crore, while Desco incurred a loss of Tk506 crore in the last fiscal year.

Regarding the losses, Arpana Islam, general manager (finance) of Titas Gas, told TBS that Titas Gas faced a substantial loss due to being brought under the minimum tax rate.

She explained that Titas Gas customers pay a 3% source tax on gas bills to the National Board of Revenue (NBR), which was previously adjusted with the taxes for the company.

"However, with the decision to impose a minimum tax, the NBR considered the source tax paid by the customers as final taxes. So the company showed the amount as expenses."

As per calculation, customers of Titas Gas paid around Tk820 crore as source tax on gas bills in FY24, and the entire amount was considered as taxes, according to officials.

As a listed company, Titas Gas is mandated to pay 20% taxes. If the company were to pay tax at a 20% rate, Titas Gas would have paid Tk38 crore as taxes, and it would able to make a profit, said an official of Titas Gas.

An official from Desco's finance department, speaking on condition of anonymity, stated that the primary reason for the significant losses was the disproportionate increase in bulk electricity tariffs compared to the prices at the consumer level. Additionally, as the dollar appreciated, the company incurred substantial losses from foreign debt repayments.

"Electricity is sold at a lower price than the rate at which it is purchased in bulk from the Power Development Board, resulting in a loss of Tk0.56 per unit of electricity sold," the official explained.

Padma Oil, Bangladesh Shipping Corporation post record profit

Padma Oil reported a record profit of Tk408 crore, while Bangladesh Shipping Corporation achieved its highest-ever profit of Tk250 crore in the last fiscal year.

Padma Oil managed to post record profit that was largely fuelled by a sharp rise in non-operating income from interest earned on bank deposits.

Improved margins on fuel sales also contributed to this robust profit, according to the company's statement.

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.  

Commodore Mahmudul Malek, managing director of the Shipping Corporation, told TBS, "Since assuming office, the current management has implemented various measures to expand the corporation's business. Thanks to these multifaceted initiatives, including operating ships to new destinations, we have achieved the highest profit in history."

Officials at the corporation attribute this remarkable profit growth to four main factors — an increase in shipping rates for the transportation of goods, the implementation of the Bangladesh Flag Vessels (Protection) (Amendment) Act, higher interest rates on fixed deposit receipts, and the appreciation of the dollar.