On the back of higher sales and inflated retail cement prices, multinational cement maker LafargeHolcim Bangladesh (LHBL) posted a 66 per cent year-on-year surge in profit in the first half of the calendar year 2023.
The publicly traded company’s net profit jumped to Tk 361.5 crore in the January–June period this year from Tk 217.3 crore recorded in the corresponding period a year earlier, as per its disclosed unaudited financial statements.
The firm’s current year’s first half-yearly profit was the highest over the last five years.
The cement maker made a profit of Tk 215.21 crore in H1 of 2021, which were Tk 84.29 crore and Tk 79.40 crore in the same period of 2020 and 2019, respectively.
The company’s financial report shows that its revenue has soared by 35 per cent in January-June 2023 on a year-on-year basis.
The listed firm’s revenues in the first six months this year stood at Tk 1527.2 crore against Tk 1127.22 crore in the same period last year.
The company earned revenue of Tk 1105.4 crore in 2021, Tk 776.9 crore in 2020, and Tk 970.4 crore in 2019.
The listed entity’s earnings per share (EPS) rose to Tk 3.11 in the current year’s first half, up 66 per cent from Tk 1.87 reported for the same period one year ago.
Iqbal Chowdhury, chief executive officer (CEO) at LafargeHolcim said, “We have secured this performance together. With continuous emphasis on agility, cost and innovation, we demonstrated strong performance in the second quarter of 2023, setting a solid foundation for the rest of the year.”
“Our diverse product portfolio, efficient route to market, digital footprint, pan Bangladesh distribution network and aggregated business played a significant role in ensuring the healthy growth momentum.”
LafargeHolcim Bangladesh has set an example in sustainable waste management through its Geocycle project. The unique feature of Geocycle is that it disposes of a wide range of non-recyclable wastes by burning them in kilns and using the heat to produce cement, according to Iqbal Chowdhury.
“Most importantly, we have our clear focus on key long-term value creation through de-carbonization,” he continued.
The cement producer’s cost of sales also increased in the current first six months, but the rate of spike was around 22 per cent. As such, LHBL managed to log 65 per cent higher gross profit in the first half this year.
As per the company’s financial statement, its revenue was up 14 per cent year-on-year to Tk 571 crore in April-June quarter of 2023. Thus, the EPS stood at Tk 170.6 crore in the June quarter, a jump of 39 per cent year-on-year.
LafargeHolcim Bangladesh shares closed at Tk 69.30 each on Thursday on the Dhaka Stock Exchange (DSE), which was 0.29 per cent lower than that of the previous session.
According to industry insiders, the country’s all cement manufacturers have to import raw materials. Only LafargeHolcim produces raw materials on its own. As a result, the company’s cost of cement production is significantly lower than those of its peers.
Operating margin of the cement and clinker segment expanded by 600 basis points YoY during the half quarter of 2023. In the same period, its revenue from the cement segment grew by 25 per cent YoY to Tk 1303 crore. However, LHBL’s net margin remained at 25 per cent YoY due to an increase in the effective tax rate, according to a UCB stock analysis.
The company paid a 48 per cent cash dividend to its shareholders for the year closing in December 2022, the highest since its inception in Bangladesh.
