FROM PAGE B1

-- DESCO, Titas Gas, Jamuna Oil, Padma Oil, and Meghna Petroleum -- were excluded from the overall accounts because their profits or losses were due to extraordinary reasons, which could bias the results.

The fuel oil trio -- Padma Oil, Jamuna Oil, and Meghna Petroleum -- recorded the highest profitability of 229 percent in FY25, mainly because profits were several times higher than turnover. Massive income from bank deposits also boosted their profitability, which is why the sector was not included in the overall calculation.

Among other sectors, IT posted 12.76 percent, leather 10.3 percent, pharmaceuticals 8.8 percent, power 7.08 percent, and luxury hotels 7 percent. Ceramic showed 5.29 percent, engineering 5 percent, food and allied 4.53 percent, textiles 4.4 percent, and cement the lowest at 0.93 percent.

“Stubborn inflation has reduced people’s spending, especially in the construction sector,” said Rashedul, adding that this contributed to low profitability in construction-related industries.

The paper sector posted a negative 21 percent, mainly due to heavy losses at Bashundhara Paper Mills.

The company said its losses were due to several macroeconomic factors, including fluctuations in foreign exchange rates, sharp rises in raw material prices, import restrictions, reluctance of financial institutions to issue Letters of Credit (LCs), a rise in bank interest rates from 9 percent to 14.5 percent, and limited availability of US dollars.

These unavoidable political and economic challenges, the company said, prevented it from opening LCs for essential raw materials, leading to significant operational disruptions and financial losses.

Difficulties in opening LCs caused periodic interruptions in manufacturing and construction supply chains. Volatility in the foreign exchange market added to the problem, as the average rate of around Tk 118 per USD significantly increased the local-currency cost of imported clinker, gypsum, slag, fly ash, and other essential raw materials.

Most companies faced similar challenges. The broader industrial sector also struggled with energy shortages and intermittent power supply, which affected both large and small manufacturers and raised operating costs due to greater reliance on alternative energy sources.

POLITICAL UNCERTAINTY AND MACROECONOMIC RISKS

“Usually, in years around elections, corporates struggle to achieve higher profitability because some uncertainty remains amid political chaos,” said Rizwan Rahman, former president of Dhaka Chamber of Commerce & Industry.

He added that government development projects slowed last year, impacting many sectors retrospectively.

“Although a political transition has taken place, there is still huge tension over fuel supply and prices due to the US-Israel war on Iran. Mismanagement and panic buying have worsened the situation,” Rahman said, warning that profit growth may remain low in the current fiscal year.

Regarding the outlook, Rashedul said, “A major risk of further depreciation of the local currency is looming amid the US-Israel war on Iran.”

He added, “Higher fuel prices and limited foreign earnings could put pressure on the country’s foreign exchange reserves, leading to a weaker local currency against the US dollar.

“If this happens, companies with large foreign loans will be affected, and the country could face prolonged high inflation. Except for export-oriented firms, most companies would feel the impact.”