LafargeHolcim revenue falls due to aggregate business dispute
The multinational cement manufacturer LafargeHolcim Bangladesh's revenue has declined for the first quarter of 2022 as it could not run its business of limestone chips, known as aggregate, due to a dispute with the government.
Earlier, in the April-June quarter of 2020, the company's revenue and profit decreased. Since then, LafargeHolcim's revenue and profits have steadily increased in each quarter.
In the January-March quarter this year, the company reported a revenue of Tk625.85 crore and a net profit of Tk94.47 crore, which was 1% and 9% respectively less than the previous year at the same time.
The company said in a press release that its profit has declined due to raw material price hikes.
"The first quarter of the year 2022 has been a quarter with external challenges. We thank our employees, channel partners and stakeholders for their resilience which enabled us to navigate successfully in these difficult times," Rajesh K Surana, chief executive officer of LafargeHolcim, said in the press release.
"We have restarted our aggregates production with permission from the Ministry of Industries. The import replacement project will save the country's foreign exchange and will ensure higher revenue for the government exchequer," he has added recently.
"In this quarter, we have started to get benefits from our waste management investment which is paving the way for our dream to become the pioneer in professional waste management solutions in the country," he continued.
The facilities are now ready to handle approximately 100,000 tonnes of waste annually in our plant which will help us to accelerate the reduction of CO2 emission and also generate alternate fuels, he said.
LafargeHolcim began crushing and selling aggregates in January 2021, and its profits began to soar with high margins in the construction commodity.
But, in September last year, the ministry asked LafargeHolcim to stop the aggregates business as its inquiry committee had found the company crushing aggregates derived from limestone coming from its mines in the northeastern Indian state of Meghalaya at an unapproved facility in Chhatak, Sunamganj.
After six months of legal battle, at the end of March this year the industries ministry has allowed LafargeHolcim to resume its business of crushing and selling aggregates.
Analysts earlier told The Business Standard that their aggregates business was contributing to around one-fifth of LafargeHolcim's revenue and making up at least one-third of its profits for the first nine months of 2021.
In 2021, the cement maker's sales jumped by 27% year-on-year to Tk2,053 crore and the profit by 64% to Tk388 crore with contributions from its aggregates business.
Riding on this growth, it had paid a 25% cash dividend for 2021, the highest since its inception in Bangladesh.
LafargeHolcim shares traded at Tk77.90 on the Dhaka Stock Exchange on Monday.
