Heidelberg Materials profit plunges 57% on raw material costs, steep competition
Country’s one of the leading cement manufacturers Heidelberg’s net profit for the year ended on 31 December 2025, plummeted by 57% to settle at Tk20 crore, a sharp decline from the previous year.
Heidelberg Materials Bangladesh PLC has witnessed a significant erosion in its bottom line for the financial year 2025, primarily driven by soaring raw material prices and an inability to adjust sales prices amidst an increasingly competitive market.
Country's one of the leading cement manufacturers Heidelberg's net profit for the year ended on 31 December 2025, plummeted by 57% to settle at Tk20 crore, a sharp decline from the previous year.
Following this downturn in earnings, the company's board of directors have recommended a drastically lower cash dividend of 11%, or Tk1.10 per share, compared to the 25% cash dividend disbursed to shareholders in 2024.
According to the audited financial report approved in a board meeting yesterday (23 April), the company's revenue saw a marginal decline of 1.52%, reaching Tk1,451 crore. However, the pressure on the cost of goods sold was evident as the gross profit slipped by 12% to Tk153 crore.
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The earnings per share (EPS) for the year stood at Tk3.55, while the net asset value (NAV) per share was recorded at Tk73.92. Perhaps, most concerning matter for the investors was the net operating cash flow per share, which turned negative at Tk0.04, highlighting a tightening liquidity position throughout the year.
The company's financial woes have reportedly intensified in the current year as evidenced by its unaudited performance for the first quarter of 2026. During the January–March period, Heidelberg Materials slipped into a net loss of Tk4.95 crore, a stark contrast to the profit recorded in the corresponding quarter of 2025.
Revenue tumbled by 16% to Tk362.40 crore during the first three months of 2026 while gross profit crashed by 55% to just Tk25 crore. This resulted in a loss per share of Tk0.88 for the quarter, further dragging down the company's net asset value.
Saikat Khan, the company secretary of Heidelberg Materials, explained the significant decline in earnings was primarily fueled by the increased cost of raw materials.
He said the firm could not fully pass these additional costs on to customers through higher sales prices due to intense market competition.
Consequently, the earnings per share declined by Tk4.35 in the first quarter compared to the same period in the previous year, he added.
However, the net operating cash flow per share showed improvement, reaching Tk7.49, largely because of reduced payments to suppliers and lower operating expense outflows during the quarter, he pointed out.
The company, which originally listed on the Dhaka Stock Exchange in 1989 as Chittagong Cement Clinkers Grinder before being acquired and eventually rebranded by the global giant Heidelberg Materials, saw its share price edge down by 0.35% to close at Tk224.90 yesterday.
To finalize the dividend and review the annual performance, the company has scheduled its annual general meeting for 18 June, with 20 May set as the record date. As of late March, the company's sponsors and directors held 60.67% of the shares while institutional investors and general shareholders held 28.61% and 10.68%, respectively.
