Jamuna Oil Company reported a 29% year-on-year surge in profit, reaching a record Tk441.67 crore in the fiscal 2023-24, driven by substantial earnings from its fixed deposit receipts (FDRs) amid rising interest rates.
According to its financial statements, the state-owned fuel distributor has recommended a record-breaking 150% cash dividend for the year, offering shareholders Tk15 per share the highest in its history.
In FY23, the company paid a 130% cash dividend, which was its highest at that time.
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Despite the impressive financial performance, Jamuna Oil’s shares fell by 0.73% yesterday on the Dhaka Stock Exchange (DSE), closing at Tk190.10 each.
The company reported earnings per share (EPS) of Tk40, up from Tk30.87 in FY23. Its net asset value (NAV) also increased to Tk2,524.46 crore from Tk2,269.07 crore. However, its net operating cash flow per share declined significantly to Tk22.88 from Tk109.01.
Company Secretary Md Masudul Islam attributed the significant profit growth to higher non-operating income due to increased interest rates.
“The company has substantial short-term investments in FDRs across several banks. The recent hike in interest rates has boosted the company’s profitability,” he explained.
Fuel sales margins also played a role in enhancing profitability. In March, the government raised the fuel sales margin for the three state-owned oil marketing companies Jamuna Oil, Meghna Petroleum, and Padma Oil.
The diesel and kerosene sales margin increased to Tk0.80 per litre from Tk0.50, while the margin for octane and petrol rose to Tk0.90 from Tk0.60 per litre. This adjustment was made following a proposal from the Bangladesh Petroleum Corporation, which had highlighted declining incomes for state-run entities.
As of March 2024, Jamuna Oil’s short-term investments, primarily in FDRs across multiple banks, amounted to Tk1,792 crore. This marks an increase from Tk1,590 crore at the end of June 2023, according to its financial report.
Interest rates on FDRs have risen significantly, climbing to over 11% in September 2024 from around 8% a year earlier. Companies with substantial FDR investments, such as Jamuna Oil, have witnessed remarkable profit growth as a result.
For instance, Meghna Petroleum reported a record Tk542.29 crore profit for FY24, reflecting a 22% increase compared to the previous fiscal year. Similarly, Padma Oil saw a 17% rise in profit, reaching Tk409 crore, largely driven by non-operating income from fixed deposits.
Jamuna Oil continued its profit growth trajectory into the first quarter of the current fiscal year. From July to September, net profit rose by 48% year-on-year, reaching Tk124.09 crore, compared to Tk83.84 crore during the same period the previous year.
The company’s annual general meeting (AGM) is scheduled for 8 February 2025, on a digital platform. The record date to identify shareholders has been set for 24 December 2024.