LafargeHolcim’s Q2 profit swells 248%

Raw material from its own source, strong distribution channels , and a new product have helped LafargeHolcim Bangladesh post an impressive growth of 248% in net profit in the April-June quarter of this year.

The net profit stood at Tk111.70 crore.

Its earnings per share were Tk0.96, which were Tk0.28 at the same period a year ago.

At the end of the first half of this year, its earnings per share stood at Tk1.85.

Besides, its sales also grew 79% to reach Tk473.70 crore during the April-June quarter.

The cement manufacturer said in a press release the sales growth is a strong manifestation of a wider acceptance of the newly-launched brand and reflection of customers' confidence in the new "Aggregate" business of the company.

"We have remained steadfast in our journey of being innovative and sustainable. Our 'Holcim Water Protect', sustainable waste management solution 'Geocycle', and new Aggregate business have set a solid momentum," Rajesh K Surana, chief executive officer of the company, said in the press release.

"Indomitable passion and spirit of our employees have helped the company deliver such a sustained performance."

Seeking anonymity, a leader of the Bangladesh Cement Manufacturers Association said LafargeHolcim produces cement raw material clinkers by itself in India. And it has invested a lot in this backward linkage. So, its expenses on raw materials are much lower.

"On the other hand, domestic companies have to import raw material and pay advance income tax at the import stage. This greatly pushes up their cost of production. Moreover, the import of raw material has been largely affected by the pandemic," he added.

It has recently launched the specialised waterproof cement "Holcim Water Protect", which is the first of its kind in the market and has started yielding incremental growth for the company.

Strengthening the digital footprints and improving customer reach are some of the other initiatives which are helping the company become more effective and efficient in the market.

Currently, LafargeHolcim has a capacity to produce 4.2 million tonnes of cement, which makes up 10% of the market in Bangladesh.

The company, which has been running cement business for almost two decades, has invested $500 million – the largest foreign direct investment in the sector – in building one fully integrated cement plant and three grinding plants.

It is a joint venture of Switzerland-based LafargeHolcim Group and Spain-based Cementos Molins.

The company has provided direct and indirect employment opportunities for over 3,000 people.

The company's share price on the Dhaka Stock Exchange fell 2.61% on Wednesday, and its closing price stood at Tk63.50 each.

LafargeHolcim, which got listed on the capital market in 2003, has a paid-up capital of Tk1,161 crore.

Sponsors and directors of the company hold 64.68% of its shares, while institutional investors 17.05%, foreign investors 0.77% and general investors 17.50%, according to the Dhaka Stock Exchange website.