LafargeHolcim Bangladesh sees 53% profit drop in Q2

LafargeHolcim Bangladesh Ltd, a frontline building material solutions provider, has announced a sharp 53% decline in profit and an 8% drop in sales in the second quarter of 2024, attributed to macroeconomic challenges affecting the construction industry.

In a statement issued today, the multinational said its profits declined to Tk80 crore in the April-June quarter, which was Tk170 crore in the same period last year.

During the quarter, its revenue declined to Tk616 crore, which was Tk671 crore in the same time of the previous year, the statement reads.

However, in the first half (January-June) of 2024, LafargeHolcim Bangladesh saw a 33% decrease in net profit to Tk243 crore and a 5% decline in revenue to Tk1,442 crore. In contrast, during the same period in 2023, the company recorded Tk361 crore in net profit and Tk1,525 crore in revenue.

"Bangladesh's economy is going through certain challenges which are affecting the construction industry, resulting in a decline in sales during the first half of 2024," said Iqbal Chowdhury, CEO of LafargeHolcim Bangladesh.

"However, our focus for sales channel expansion, stronger aggregates performance, digitalisation and addressing the waste challenges through Geocycle remained consistent," he said.

"With a continuous emphasis on agility, cost & innovation, we are confident to demonstrate solid performance in the quarters to come," the company CEO added.

Earlier, LafargeHolcim's net profit crossed the Tk500 crore mark in 2023, for the first time in its history.

In 2023, its net profit was Tk594 crore, and it paid a 50% cash dividend to its shareholders, again the highest payout in its history.

Its share price closed at Tk62 each on Tuesday at the Dhaka Stock Exchange (DSE).

LafargeHolcim's sustainable waste management initiative Geocycle offers long-term solutions to the country's waste management challenges.

In the statement, the company said 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 the Sylhet City Corporation (SCC) to sustainably manage the municipal solid waste (MSW) of the city which shall 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 persisting foreign exchange pressure. Despite that, we are optimistic and well poised to continuously deliver a strong performance with a leading industry margin, reads in the statements.

LafargeHolcim Bangladesh is a joint venture of Holcim Group based in Switzerland and Cementos Molins of Spain.

Operating for more than two decades in the country, the company has invested $500 million in building one fully integrated cement plant and three grinding stations, the largest foreign direct investment in the sector.

With state-of-the-art technology and well-groomed staff, the company produces world-class cement and other building materials to meet the growing demand generated by massive infrastructure development programs and improved socio-economic conditions.

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