Heidelberg Materials Bangladesh's revenue drops 19.5% in first half of 2024
Heidelberg Materials Bangladesh reported a 19.50% drop in revenue to Tk821 crore for the January-June period this year compared to the corresponding period last year.
Besides, the multinational cement manufacturer's net profit fell by 12% year-on-year to Tk42.12 crore in the first half of this year, with earnings per share at Tk7.45.
The company faced challenges due to a shortage in foreign currency, leading to the inability to open letters of credit and consequently hindering its ability to utilise its full production capacity, as reported by company sources.
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In the April-June quarter, its sales dropped 25% to Tk341 crore compared to the same period the previous year. During the second quarter, its net profit dropped over 69% to Tk2.79 crore compared to the previous year, and earnings per share stood at Tk0.50.
In response to TBS queries, Saikat Khan, director of Legal and Corporate Affairs, after consulting the company's Managing Director Jose Marcelino Ugarte, said lower sales and net profit were caused by market degrowth and adherence to a premium pricing strategy to maintain the desired margin.
Besides, skyrocketing commodity prices are limiting consumer's purchasing power, causing them to postpone or slow down construction works, he said. "Unstable economic and political conditions are also contributing to these delays."
The business is facing significant challenges from an oversaturated market, foreign exchange crisis, high inflation, and logistical issues, he added.
Heidelberg's peer competitor LafargeHolcim Bangladesh also saw a 33% decrease in net profit to Tk243 crore and a 5% decline in revenue to Tk1,442 crore during the first half. In contrast, during the same period in 2023, the company recorded Tk361 crore in net profit and Tk1,525 crore in revenue.
Heidelberg's other financials
The net asset value (NAV) per share of Heidelberg increased to Tk72.15 as of June 2024, while its net operating cash flow per share (NOCFPS) declined to Tk15.08.
NOCFPS decreased compared to the same period last year, mainly due to lower sales volume and collection, according to its disclosure.
The multinational company has paid a 25% cash dividend to its shareholders for the year 2023.
The cement manufacturer posted an EPS of Tk8.13 for 2023. Earlier in 2022, it had paid a 10% cash dividend despite incurring a loss of Tk23 crore.
Its shares closed at Tk301.90 on Monday, which was 0.10% higher than the previous year at the Dhaka Stock Exchange.
In the last month till 29 July, its share price jumped 28%.
The company got listed on the Dhaka Stock Exchange in 1989 as Chittagong Cement Clinkers Grinder, which was later acquired by HeidelbergCement, currently renamed as Heidelberg Materials.
