Added capacity, higher price help Premier Cement recover profits

Infographic: TBS

Premier Cement Mills Ltd, after absorbing losses for two straight quarters through September 2022, made a meagre profit in the December quarter, and then finally bounced back strongly in the January to March quarter of the current fiscal year.

The cement grinder's earnings per share (EPS) grew to Tk2.92 in the March quarter, from Tk0.14 in the same quarter of the previous fiscal.

"Two factors together helped us recover earnings in the March quarter – the expanded capacity, and some breathing space in business," said the company's Chief Financial Officer (CFO) Md Selim Reza.  

Expanded capacity, added in July last year, helped the company achieve 36% volume growth, while the price increase to cope up with the surged costs helped it earn 41% higher revenue in the January-March period.

Secondly, both the long-lasting and sudden adversities in the cement business eased a bit, said Reza.

The cement industry has long been struggling to increase prices due to stiff competitions, and earlier this year, they finally managed to get some better prices both from the government and the private sector customers.

In the last quarter, international prices of raw materials were calm a bit. Also, the dollar price did not fluctuate like it did in the middle of last year, said the CFO.

Due to an unforeseen spike in dollar prices, in the April-June quarter last year, the company incurred a loss of Tk11.07 against each share having a face value of Tk10.

Cement consumption in the country dropped by more than 1.5% in 2022, according to Bangladesh Cement Manufacturers Association (BCMA). Selim Reza believes the year-on-year growth was positive in the January-March quarter this year.

However, raw material prices started to inch up again in the international sources and the industry was yet to be worry-free, according to Reza.

Premier Cement EPS was Tk0.46 for the first nine months of the fiscal year, which was Tk0.37 over the same period of the previous year.

At the end of March, the company's net asset value per share stood at Tk66.59, while its shares on 18 April took off from the floor prices after more than five months to close 3.6% higher at Tk46.1.