Heidelberg sees loss in Q3 on lower sales

Heidelberg Materials Bangladesh, a multinational cement maker, reported a loss of Tk 7.96 million for the third quarter (Q3) this year due to decreased sales volume amid an economic slowdown.
Although the company posted profits in the previous two quarters of this year, it incurred losses in the July-September quarter mainly because of a decline in operating profit and revenue.
The cement maker also turned a profit of Tk 27.07 million in the third quarter of the previous year.
In a disclosure published on Tuesday, Heidelberg Materials attributed the loss in Q3, 2024 to lower sales and a decreased net sales price per ton.
Due to a decline in sales volume and price, the company's revenue fell 38 per cent year-on-year to Tk 2.93 billion in the third quarter of this year.
As a result, the company did not experience growth in operating profit, despite carefully managing costs of goods sold and administrative expenses.
Heidelberg reduced the costs of goods sold by 18 per cent year-on-year to Tk 2.72 billion in Q3.
Also, the administrative expenses declined 9 per cent in Q3, compared to the same period of the previous year.
Market analysts noted that a 38 per cent drop in revenue is a huge setback for a company like Heidelberg.
They attributed the decline in the company's revenue earnings to a challenging macroeconomic environment.
A stalemate in the country's mega projects, combined with reduced disposable incomes of people, contributed to a decline in cement consumption, which in turn impacted the revenue earnings of cement manufacturers.
However, based on this year's nine-month earnings results, the company reported a profit of Tk 413.24 million, an 18 percent decrease year-on-year compared to the same period last year.
It also posted profits in the previous two quarters of 2024. The company saw a profit of Tk 393 million in Q1 and Tk 421 million in Q2, 2024.
The multinational cement maker experienced a steep year-on-year decline in operating cash flow for the period of January-September, 2024.
In its disclosure, the company said its cash flow declined due to lower sales volume and collection, and higher income tax payment.
The net operating cash flow per share (NOCFPS) was Tk 9.77 for January-September 2024 as against Tk 24.91 for January-September 2023.
Heidelberg Materials has failed to exhibit consistency in registering profits in the last five years.
The company reported a loss of Tk 196 million in 2019, a loss of Tk 80 million in 2020 and a loss of Tk 233 million in 2022.
On the other hand, Heidelberg Materials bagged a profit of Tk 475 million in 2021 while the profit was Tk 459 million in 2023.
Listed on Dhaka Stock Exchange in 1989, the company distributed 25 per cent cash dividend in 2023, 10 per cent cash in 2022, 26 per cent cash in 2021 and 20 per cent cash dividend in 2020.
The stock price of Heidelberg closed at Tk 246.20 on Tuesday.

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