Meghna Petroleum's Q2 profit down as demand for furnace oil drops

Meghna Petroleum Limited (MPL) saw a marginal decline of 5.25 per cent in profit to Tk 1.55 billion in the second quarter of FY26 as furnace oil sales dropped.

In the October-December quarter of FY26, earnings per share fell to Tk 14.30 from Tk 15.09 in the same period of the previous year.

"Sales of furnace oil to the Bangladesh Power Development Board were slashed significantly in the quarter," said Md Shahirul Hassan, managing director of the company, while speaking to The FE over the phone.

MPL markets a wide range of petroleum products, including high octane blending component (HOBC), motor spirit (MS), superior kerosene oil (SKO), high-speed diesel (HSD), jet base oil (JBO), furnace oil (FO), lubricants, and bitumen. It is the official distributor of BP lubricants and Visco 3000 in Bangladesh.

Fuel-based power plants in Bangladesh, which require furnace oil, are being gradually phased out. Moreover, demand for electricity was lower in the cooler months from October to December, and so the need for furnace oil fell.

Another reason behind the profit decline could be lower interest income from troubled Islamic banks that are undergoing merger. According to the FY25 financial statements, the company held FDRs worth Tk 5.48 billion in First Security Islami Bank, Global Islami Bank, Padma Bank, and Union Bank.

The detailed financial statement has not been disclosed yet.

MPL, a subsidiary of the state-owned Bangladesh Petroleum Corporation, did well in the six-month period as EPS rose 2.8 per cent year-on-year to Tk 28.59 for July-December last year.

Following the earnings disclosure, the share price of the company rose 0.96 per cent to Tk 199.50 per share on Wednesday on the Dhaka Stock Exchange (DSE).

Meghna Petroleum is one of the few listed companies that have paid more than 150 per cent cash dividends for the last five years. It has maintained a growth trajectory over the last six to seven years.

farhan.fardaus@gmail.com