Heidelberg Materials reports loss amid political instability

Infographic: TBS

Heidelberg Materials Bangladesh, a multinational cement manufacturer, reported a loss in the July-September quarter as its revenue significantly declined amid the political instability in the country.

The German-based cement manufacturer disclosed the financial statement for the third quarter of this year through the Dhaka Stock Exchange (DSE) today.

According to the statement, Heidelberg Materials Bangladesh incurred a loss of Tk0.79 crore during the quarter, while its revenue dropped by 20% to Tk293 crore compared to the previous year in the same quarter.

Following the news, its share closed 3.79% lower at Tk246.20 at the DSE.

Terence Ong Kian Hock, the newly appointed managing director of Heidelberg Materials Bangladesh, told TBS that nationwide demand for cement slowed in July due to the anti-government movement, placing the industry in a challenging position.

This decline in demand has persisted following the fall of the previous government, as political unrest continues to rise. Consequently, the country is experiencing significant economic uncertainty, leading to a near halt in construction activities across Bangladesh, he said.

Besides, skyrocketing commodity prices are limiting consumer's purchasing power, causing them to postpone or slow down construction works, he said.

He added that despite the decline in revenue, the loss did not reach alarming levels, as the company implemented several initiatives to mitigate the impact of the ongoing uncertainty.

In the first nine months of this year, the company's revenue decreased by 19.45% to Tk1,115 crore, while profit fell by 18% to Tk41.32 crore compared to the same period last year.

By the end of September, its earnings per share was Tk7.31, down from Tk8.94 a year earlier.

Meanwhile, Heidelberg's peer competitor LafargeHolcim Bangladesh also saw a 45% decrease in profit to Tk87.80 crore and a 2% decline in revenue to Tk627 crore during the July-September compared to the previous year at the same time.

In the first nine months of this year, LafargeHolcim's sales decreased by 4% to Tk2,069 crore compared to Tk2,164 crore in the same period of the last year.

During the same period, its profit declined by 37% year-on-year to Tk330 crore and the earnings per share stood at Tk2.85.

In the press release, LafargeHolcim Bangladesh CEO Iqbal Chowdhury said, "Amid the broader economic challenges impacting the construction sector in the country, I am proud to share that LafargeHolcim has demonstrated resilience and stronger performance in the industry."

"We are strategically focusing on expanding our sales channels, strengthening the aggregates business, advancing digitalisation and eco-friendly waste co-processing through our geocycle wing."

He added that the company remains committed to cost optimisation and innovation, which he believes will help deliver robust results in the future.

"The rest of the year will be challenging due to the high inflation and the deficit in foreign currency. Despite that, we are optimistic and well poised to deliver a resilient performance with leading industry margin," he said.