LafargeHolcim Bangladesh (LHBL), the multinational cement maker, posted a 33 per cent year-on-year fall in profit in the first half of the calendar year 2024 as the economy is going through certain challenges that are affecting the construction industry, resulting in a decline in the company’s sales growth.
The publicly traded company’s net profit declined to Tk 243 crore in the January-June period this year, from Tk 361 crore recorded in H1 of 2023, as per its unaudited financial statements disclosed on Tuesday.
The firm’s first half-yearly profit in 2023 was the highest in the last five years.
Industry de-growth resulted in a net sales reduction of 5 per cent in H1 due to macro-economic challenges, said the company.
LHBL CEO Iqbal Chowdhury said that the Bangladeshi economy is going through certain challenges that are affecting the construction industry, resulting in a decline in sales growth during the first half of 2024.
“However, our focus on sales channel expansion, stronger aggregates performance, digitalisation and addressing the waste challenges through Geocycle remained consistent. With continuous emphasis on Agility, Cost & Innovation, we are confident to demonstrate solid performance in the quarters to come,” he said.
The company’s Earnings Per Share (EPS) declined by 33 per cent to Tk 2.09 from Tk 3.11 at the same time last year.
During H1 of 2024, LHBL’s operating earnings before interest and taxes (EBIT) reached Tk 346 crore, 25 per cent less than the amount recorded in the same period of last year.
Net sales decreased by 5 per cent to Tk 1,441 crore compared to Tk 1,525 crore in H1 of 2023.
The company said that Geocycle, the leading provider of sustainable and circular waste management solutions, is continuing to offer long-term solutions to the country’s waste management challenges.
More than 23,000 tonnes of diverse waste streams were safely disposed of during this period, accelerating the green growth agenda of the company.
The company has started receiving solid waste from Sylhet City Corporation (SCC) with the aim of sustainably managing the municipal solid waste (MSW) of the city, which will play an important role in increasing the thermal substitution rate (TSR) for the rest of the year.
The rest of the year will be challenging due to ongoing inflation and the persisting foreign exchange pressure. Despite that, the company is optimistic and well poised to continuously deliver a strong performance with a leading industry margin, said LHBL.
As per the company’s financial statement, its revenue fell 8 per cent year-on-year to Tk 616 crore in the April-June quarter of 2024. Thus, the EPS stood at Tk 0.69 in the June quarter, a fall of 53 per cent year-on-year.
LHBL shares closed at Tk 62 each at the Dhaka Stock Exchange on Tuesday.
According to industry insiders, all cement manufacturers in the country have to import raw materials. Only LHBL produces raw materials on its own. As a result, the company’s cost of cement production is significantly lower than its peers.
The company paid a 50 per cent cash dividend to its shareholders for the year that ended in December 2023, the highest since its inception in Bangladesh.
