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Earnings of most of the listed cement manufacturers slumped in the recent quarters compared to the same period in the previous year.
Out of the seven cement makers listed on the Dhaka Stock Exchange, earnings per share (EPS) of five firms declined July-December, 2019 (three of them reported negative earnings) while the rest two made modest profit.
The EPS of Aramit Cement, Heidelberg Cement and MI Cement Factory turned negative during the period under review.
The EPS is the portion of a company’s profit allocated to each outstanding share of common stock, meaning it is an indicator of the company’s profitability. The higher a company’s EPS, the more profitable it is considered.
According to DSE data, the EPS of Aramit Cement was Tk 2.69 in the negative in the July-December period of 2019 against Tk 3.95 (negative) in the same period of the previous year.
The Aramit Cement has reported loss of Tk 91.13 million during the period under review, the DSE data shows.
Heidelberg Cement Bangladesh, a foreign firm, witnessed a negative EPS of Tk 2.53 for July-September, 2019 quarter against Tk 2.14 in the same quarter last year.
The company reported loss of Tk 142.68 million in three quarters ended on September 30, 2019, according to DSE statistics.
MI Cement Factory, which produces Crown brand cement, witnessed a declining trend in EPS as its EPS was negative Tk 1.89 for July-December, 2019 as against Tk 0.78 in the same period last year.
The MI Cement has reported loss of Tk 280.66 million in six months for July-December, 2019.
Meghna Cement’s EPS fell to Tk 0.65 for July-December, 2019 as against Tk 0.70 in the same period of the previous year.
The Meghna Cement has reported profit of Tk 16.96 million in six months for July-December, 2019.
Premier Cement Mill’s EPS also fell to Tk 1.16 for July-December, 2019 as against Tk 1.74 for the same period of the previous year.
The company has made a profit of Tk 122.43 million in six months for July-December, 2019.
The consolidated EPS of Confidence Cement stood at Tk 5.12 for July-December, 2019 which was Tk 2.58 (solo) during the same period last year.
The Confidence Cement made profit of Tk 381.17 million for July-December period of 2019.
LafargeHolcim Bangladesh, also a foreign company, reported its EPS of Tk 1.50 for the year ended on December 31, 2019. Its EPS was Tk 0.96 for the year ended on December 31, 2018.
The board of the LafargeHolcim has recommended 10 per cent cash dividend for the year ended on December 31, 2019.
Industry insiders said the cement-makers are facing challenges to make profits due to intense competition despite increasing consumption, particularly by the government.
“Unhealthy competition among the manufacturers and excess production are reducing profit margin,” said an official of a cement manufacturer, seeking anonymity.
He noted that the company’s profit margin declined owing to the competition and the rising production and transport cost.
The cement manufacturers’ loss will likely to be increased days ahead as the coronavirus pandemic has disrupted the import of raw materials and production — a development that will also deal a blow to real estate and infrastructure projects.
If the situation goes on like this for the next three or four months, the companies will face huge losses, he added.
(FE)
