Political uncertainty drags down foreign cos' income in Jan-Sept

Most multinational companies saw their profits plummet in January-September this year compared to the same period last year, largely due to high finance costs and macroeconomic challenges amid political uncertainty.

Economic activities have remained sluggish following the political changeover last year, squeezing demand and shrinking profitability, according to market analysts.

Though some companies showed year-on-year recovery in the latest quarter to September, owing to easing inflation and a stable forex market, overall earnings in the first nine months of the year remained subdued due to a sharp year-on-year decline in income in H1.

"The broader economic activities remained slow amid prevailing political uncertainties while the costs of operation increased due to high input costs, hitting the multinational companies' bottom line," said Md Akramul Alam, head of research at Royal Capital.

The Bangladesh Bank's tight monetary and fiscal measures since August last year cut demand in the country. Moreover, private sector credit growth fell to a historic low of 6.35 per cent in August this year, reflecting waning business confidence and tighter lending conditions.

Of the 13 multinational companies listed on the stock market, seven saw their profits wiped out by 2 per cent to 95 per cent, while RAK Ceramics' losses escalated 69 per cent year-on-year in the nine months through September this year.

Fast-moving consumer goods companies such as Reckitt Benckiser, Unilever Consumer Care, and Marico secured profit and sales growth amid easing inflation, while cement and ceramic manufacturers endured a decline in profitability against the backdrop of a slowdown in the construction industry driven by reduced public sector spending.

Combined profits of these multinational companies plunged 28 per cent year-on-year to Tk 45 billion, while revenue dropped 2.54 per cent to Tk 346 billion in January-September this year, according to financial statements published by the companies.

Asif Khan, chairman of EDGE Asset Management, said the multinational companies failed to see growth in revenue mainly because of macroeconomic worries at a time when consumers had little disposable income with inflation hovering over 9 per cent.

"People kept in check the use of luxury products amid a rise in the prices of necessary and life-saving products," said Mr Khan.

All this happened when many companies could not adjust their product prices in line with increasing input costs, as high inflation had already weakened consumers' purchasing capacity, he added.

As the foreign firms operate in diverse sectors, factors behind profit erosion vary significantly from one company to another.

Increased finance costs reined in the bottom-line growth of multinational companies that have huge debt burdens.

Singer Bangladesh sank into the red, suffering Tk 1.14 billion in losses in January-September this year, as opposed to a profit of Tk 50 million in the same period the year before, owing to a high debt burden.

Singer, however, said the loans it had taken funded the construction of its new manufacturing plant at the Bangladesh Special Economic Zone (BSEZ), a strategic move expected to triple production capacity to achieve cost advantages.

"The boost in production will improve the company's profitability, which is anticipated to become visible in the coming years," said the company in its earnings note.

Meanwhile, as government spending on the Annual Development Programme was cut, cement producers received a blow, said Mr Alam, adding that the overall construction sector is under pressure in the face of high inflation.

Heidelberg Materials' profit plummeted 44 per cent year-on-year, while sales dropped 2 per cent in January-September this year.

However, another multinational cement manufacturer, LafargeHolcim, secured a 7.6 per cent growth in profit, driven by higher sales of premium products and aggregates.

"Despite a broader slowdown in the construction industry driven by reduced public sector spending, the premium product portfolio and the aggregates business continued its growth momentum," said Md Iqbal Chowdhury, chief executive officer of the company, in a statement.

Bangladesh's top two mobile operators, Grameenphone and Robi Axiata, posted contrasting earnings in the first nine months of 2025, owing to diverging cost structures and financial strategies amid a wider economic slowdown.

Robi's profit surged 57 per cent year-on-year in the nine months through September, largely due to foreign exchange gains amid a stable forex market and a sharp reduction in operating expenses.

"Robi continued on the growth trajectory, supported by a relatively better economic outlook," said Ziad Shatara, managing director and CEO of Robi Axiata, in a statement.

On the other hand, GP, the largest telecom operator in the country, saw a 23 per cent drop in profit during the time under review, due mainly to the company's financing and cost management.

GP's finance costs rose 33 per cent during the January-September period, driven by higher interest expenses on lease liabilities, which jumped about 23 per cent.

Linde Bangladesh's profit saw a sharp decline of 95 per cent year-on-year to Tk 286 million in January-September this year, despite gas sales remaining almost the same.

The multinational industrial gas producer had earned a profit of Tk 6.08 billion during the nine months last year as one-off income from selling its welding business. This year such a one-off profit was absent.

The financial year for Berger Paints and Marico Bangladesh runs from April to March. So, their April-September data have been taken into account to see how they have performed this year.

Berger Paints' profit dropped 2 per cent year-on-year to Tk 1.49 billion in April-September, while Marico secured a 9 per cent year-on-year growth in profit during the same period.

Reckitt Benckiser also saw 8.5 per cent profit growth, while Unilever Consumer Care reported 10 per cent profit growth, riding on higher sales as inflation eased to some extent in the recent quarter.

The government's fiscal and monetary policies are working and have helped cool inflation. "Once the macroeconomic situation improves, businesses will rebound," said Mr Alam of Royal Capital.

"Political stability, macroeconomic improvement, and consumer confidence are crucial for business in the coming months," said Mr Alam.

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