Most cement makers earn more in Q1, supported by sales price hikes, cheaper materials

Five of the seven listed cement manufacturers improved their earnings in the July-September quarter of FY24, overcoming challenges stemming from rising energy costs as well as the depreciation of the taka against the dollar.

The cement makers managed to offset additional costs partially by boosting sales prices and taking advantage of the recent reduction in raw materials' prices in the global market.

Crown Cement, Heidelberg Cement, and Premier Cement rebounded in the first quarter of FY24 from losses endured in the same quarter a year ago.

LafargeHolcim's profit shot up a whopping 41 per cent in the three months through September, compared to the same period of the previous fiscal year, while Confidence Cement reported 42 per cent higher profit year-on-year for the July-September quarter.

On the other hand, the performance of Aramit Cement and Meghna Cement worsened during the period, compared to the same quarter last year.

Aramit Cement, a B-category stock, saw its losses widen by 52 per cent from a year earlier, while Meghna Cement's profit dropped 56 per cent year-on-year in the first quarter of FY24.

Confidence Cement, which manufactures cement, aggregates, and ready-mix concrete, unveiled its first-quarter results on Thursday. It reported a profit of Tk 186.58 million, up from Tk 132 million the year before.

Company secretary Md Delowar Hossain said the profit had gone up due to an increase in the sales prices and reduced cost on raw materials, compared to the same quarter last year.

LafargeHolcim's profit grew as the sales revenue was up 12 per cent in Q1 from the same period of the previous year.

"This quarter's performance demonstrates the strength of our diverse product portfolio and strategic presence driven by innovative products, high-value solutions, digital footprint, and new channels," said Iqbal Chowdhury, chief executive officer of LafargeHolcim Bangladesh.

"In spite of certain external challenges, we are confident and optimistic to deliver sustained strong performance like the previous quarters," he added.

Crown Cement, one of the leading players in the cement industry, has made a remarkable recovery, with a profit of Tk 344 million in the July-September quarter, whereas it suffered a loss of Tk 53 million in the same quarter of the previous fiscal year.

This turnaround was driven by a 22 per cent sales growth, and an increase in product prices, the company said in its earnings notes.

Crown Cement increased sales prices by 10.56 per cent year-on-year during the quarter, despite inflationary pressure.

Heidelberg Cement, one of the largest manufacturers of top-quality cement, also rebounded, riding on higher selling prices "compared to the cost of goods sold", said the Germany-based company in its earnings note.

Premier Cement also experienced a significant year-on-year jump in revenue in the quarter through September.

Company secretary Kazi Md Shafiqur Rahman said the company could come out of the red because of the sales growth. Two factors together helped the company recover strongly -- its expanded capacity, and some breathing space in business.

Increased capacity helped the company achieve 68 per cent sales growth, while a product price increase meant to cope with the surge in costs helped gain profit.

Meghna Cement Mills, a concern of the Bashundhara Group, witnessed a 56 per cent lower profit to Tk 4.04 million in Q1 from the year before, owing to a rise in the operating and other expenditures.

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