LafargeHolcim Bangladesh Net Profit soars by a record 64%

• Significant expansion of Net Profit Margin by 400 basis points
• Record Free Cash Flow (FCF) of BDT 5,122m with an improvement by 53
• Entry into Alternative Fuel Business strengthens further the focus on sustainability

                      Performance overview for the year ended 31st December 2021

Mr Rajesh K Surana, CEO of the Company said:

2021 has been an unprecedented year for everyone with so many external challenges. We are happy to deliver another year with record top-line improvement by 27 and net profit improvement by staggering 64 . We thank our employees for their resilience, which enabled us to navigate successfully in these difficult times.

It is the persistent focus of our colleagues on our key long term value creation drivers to become local leaders in innovative and sustainable solutions. During the year we successfully launched two new green and specialised cement products- “Water Protect” and “Shokti” which have received very good customer response. The Company’s digital program reaching new milestones with the successful launch of the business channel “Shojon” and the “E-commerce” platform.

We accelerated our focus on the usage of alternative fuels with our “Geocycle” business and launched Aggregates business. The Company today provides one of the most professional waste disposal services to a number of reputed business houses and is capable of disposing more than 50,000 tons of waste annually with the new automated waste feeding system. Our investment in state of the art aggregate manufacturing unit shall create local employment and save valuable foreign exchange while increasing the contribution to the exchequer.

We are moving into 2022 with the continued strong motivation and firmly on focus to achieve sustainable growth by further expanding our footprints in the building materials space as a unique solutions and service provider.

Performance

Net Sales during the year increased by 27 to 20,534 mBDT compared to 16,222 mBDT for the year 2020, Aggregates generated a sale of 350KT volume in the first 9 months’ time. This is the first of its kind local manufacturing of high grade Aggregates in Bangladesh.

The Profit after Tax (PAT) during the year up by 64 vs previous year at 3,882 mBDT against 2,361 mBDT of last year.    

We continued to introduce new channel and new products in the market to fulfil the customer need and to reach our products to consumers door step. ‘SHOJON’, a new distribution channel was introduced with digital app to cater white space retailers where our brand was not available.

Holcim Shokti' - the First Rapid Early Strength Cement in Bangladesh Market was launched later part of the year. Holcim Shokti is a game changer for our market as it improves construction turnaround times, lowers the construction costs and enables high-rise construction.

With an ambition to establish the Company as the most innovative player in the Bangladesh market with a diverse portfolio, Holcim Water Protect was also introduced in Bangladesh market. Holcim Water Protect is a unique solution to address the issue of dampness of walls being faced by most Bangladeshi people due to the heavy rains and humidity in the climate.

The company consistently delivering strong business performance over the years and generating healthy cash flow, is well geared to invest in the growing construction materials market in Bangladesh. 

Dividend

As the company has successfully delivered superlative results during the year 2021, The Board of Directors of LafargeHolcim Bangladesh Limited has recommended payment of final cash dividend @25 at Tk. 2.50/- per Equity Share of Tk.10 face value aggregating to Tk. 290 crore for the year ending 2021 which shows their renewed confidence in the sustainability of the Company.

Outlook

Despite the uncertainty and disruptions surrounding Omicron, the Company believes that Bangladesh with its strong record of growth and sound economic policies will continue its growth momentum. The recent initiatives by the Government coupled with growth in Export and healthy GDP growth will fuel the business demand. There is a risk of increased production cost due to possible GAS and Fuel price hike. Improvements in inward remittances will help resurgence of rural demand. Additionally, Government impetus on infrastructure shall play a strong role in driving cement demand.

About LafargeHolcim Bangladesh

LafargeHolcim Bangladesh Ltd. (LHBL) is a frontline building materials company in Bangladesh. Operating for almost two decades, it has invested ~ US$ 500 million in building one fully integrated cement plant and three grinding plants, the largest foreign direct investment in the sector. It has also set up manufacturing plant in producing best quality coarse Aggregates in Bangladesh. The company also provides services in professional waste management namely “Geocycle”. It is a joint venture of Holcim Group based in Switzerland and Cementos Molins based in Spain and a listed company. With state-of-the art technology and well groomed staff, the company produces world class cement to meet the growing demand generated by massive infrastructure development programs and improved socio economic conditions. The company has provided direct and indirect employment opportunities for over 3,000 people.

With its grip in global standards and strength in innovations, LafargeHolcim Bangladesh Limited is also regarded as a dependable solution provider in construction materials. It is producing and supplying customized cement for high profile projects in the country.