LafargeHolcim’s profit rises 39pc on higher sales, retail prices

LafargeHolcim Bangladesh gained a 39 per cent year-on-year growth in profit to Tk 1.71 billion in the three months to June, thanks to increased sales of aggregates and cement price hike.
The multinational cement maker's earnings jumped as sales revenue rose 34 per cent to Tk 6.71 billion in the quarter, compared to the same period of the previous year.
Diverse product portfolio, efficient marketing, digital footprint, strong distribution networks and aggregates business played a significant role in ensuring a healthy growth momentum, said Iqbal Chowdhury, chief executive officer of LafargeHolcim.
In the first half to June this year, the company's sales soared 35 per cent year-on-year, while profit after tax surged more than 66 per cent.
The company's business went well especially in sales of aggregates, which grew year-on-year at a pace of 206 per cent to Tk 2.17 billion in the six months to June.
"Innovation and cost optimization helped the company demonstrate strong performance, setting a solid foundation for the rest of the year," said Mr Chowdhury, in an earnings note.
The company's earnings before interest and tax (EBIT) stood at Tk 4.60 billion for the first half of the year, a whopping 79 per cent jump from the same period last year, despite challenging market conditions.
The chief of the company said it would continue focusing on expansion of channels and product portfolio and improve digital footprint to ensure a sustainable growth.
LafargeHolcim has made progress in implementing a waste management initiative called "Geocyle" to become carbon neutral by 2050.
"In a volatile and high-cost environment, we continue to carefully balance our operations to mitigate the challenges. We are confident to deliver another year of strong growth in 2023," said the company chief.
LafargeHolcim is the only cement manufacturer that posted record profit in 2022 when the industry as a whole showed its worst performance in a decade due to soaring costs, a decline in development works, and a stiff competition among peers amid an acute shortage of dollars.
Out of the seven companies listed in the stock market, four went into the red and two others saw their profit go down by 15-90 per cent last year.
On the other hand, LafargeHolcim paid out 48 per cent cash dividend to shareholders for 2022 after securing an annual profit of Tk 4.45 billion, the highest in its history.
Industry insiders say LafargeHolcim has a unique edge in business as it depends on its own source of core raw material - limestone, which is transported from mines in Meghalaya to its factory in Chhatak, Sylhet by a conveyor belt.
This advantage creates an opportunity for the company to avoid freight charges and escape international raw material market volatility, two major factors that shrink the profitability of its competitors.
LafargeHolcim has been producing aggregates in its Chhatak plant since January 2021. The profitable business also contributed to the company's revenue and profit growth.
Some other cement makers, however, rebounded in the January-March quarter as the prices of raw materials started cooling down in the global market since October last year while the retail prices of cement rose about 15 to 20 per cent.

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