LINDE BD reported 2Q CY22 NPAT of BDT 233mn (EPS: BDT 15.3), implying a c32% yoy decline against NPAT of BDT 345mn (EPS: BDT 22.54) in 2Q CY21. Lower sales (8% YoY decline) and 919bps gross margin contraction resulted in the decreased bottom-line. In H1 CY22 NPAT stood at BDT 532mn (EPS BDT 34.95), which translates to 16% decline in earnings YoY.
2Q CY22 revenue declined by c8% YoY to BDT 1,154mn. c75% of LINDE BD’s revenue comes from the sale of Bulk Gases and PG&P (inclusive of electrodes and industrial packages gases) that are largely used in the construction sectors. However, like other countries, Bangladesh is passing through a high inflationary period owing to increasing commodity prices in the international market and local currency depreciation against strong USD. In June 2022, the point-to-point inflation was 7.56% - highest in nine years. During such high inflationary period, the private construction activities usually stall. On top of that, the increasing price of construction materials – steel, cement, bricks etc. in the local market has further dissuaded the public to continue the construction works at the normal level. Moreover, the government has decided to suspend low priority infrastructure development projects temporarily as the fiscal pressure is increasing. All of these factors hampered the sales growth for LINDE BD.
2Q CY22 GPM stood at 34.2%, down by 919bps YoY, attributed to higher price of raw materials (mainly copper and iron ore), increased freight cost in the global market. The 10.2% depreciation of BDT against the USD has further made the import of raw materials more expensive.
Opex to sales ratio improved by 389bps. It is due to the austerity measures undertaken.