Written by The Banking Post
Dhaka, July 27 — Heidelberg Materials Bangladesh has reported a 5.26 percent year-on-year decline in net profit to Tk 26.52 million for the April–June quarter of 2025, largely due to a significant deferred tax expense, despite strong gains in gross and operating profits.
The company’s earnings per share (EPS) stood at Tk 0.47 for the second quarter, down from Tk 0.50 in the same period a year ago, according to a disclosure published on its website on Saturday.
While Heidelberg attributed the drop in earnings to lower sales and reduced profit margins, the financial statement reveals that a deferred income tax expense of approximately Tk 22 million during the quarter played a key role in diminishing net profit.
Revenue for the quarter edged down marginally by 0.48 percent year-on-year to Tk 3.40 billion. In contrast, gross profit rose sharply by nearly 30 percent to Tk 360.6 million, signaling improved production efficiency or cost management. Operating profit also nearly doubled from a year earlier. However, these improvements were overshadowed by the tax adjustment, which eroded the bottom-line gain.
In the first half of 2025 (January–June), net profit fell 47 percent year-on-year to Tk 223 million, indicating a more severe performance slump in the first quarter than in the second. During the six-month period, sales dropped 6.42 percent, while gross profit contracted by 16.2 percent to Tk 0.9 billion.
Net operating cash flow per share (NOCFPS) also remained under pressure, standing at a negative Tk 10.14 per share in H1 2025, compared to a negative Tk 15.08 in the corresponding period of the previous year. The company cited lower sales and collections alongside higher payments as reasons for the cash flow strain.
Heidelberg Materials, known for its premium cement brands ScanCement and RubyCement, holds the third-largest market share among listed cement producers in Bangladesh, trailing LafargeHolcim and Crown Cement.
Industry insiders note that Bangladesh’s cement sector is grappling with overcapacity and fierce competition. Local non-listed giants such as Shah Cement and Bashundhara Cement continue to challenge multinational players by leveraging aggressive pricing, large-scale operations, and extensive logistics networks. A 2023 report from the emerging credit rating industry highlights how these dynamics are putting sustained pressure on market prices and profit margins across the sector.
