HeidelbergCement Bangladesh profits hit by multiple factors

HeidelbergCement Bangladesh posted an unaudited net profit of BDT43.5m (US$0.513m) for the first quarter of 2020, against earnings of BDT193m in the 1Q19. The fall in profit is attributed to an increase in cost of goods sold, alongside increased warehousing, distribution, selling and administrative expenses.
 
The total revenue, however, increased to BDT3.82bn from BDT3.61bn. The cost of sales stood at BDT3.374bn.
 
It also reported a higher distribution cost of BDT114.4m against BDT89m in same period last year, while administrative expenses were higher at BDT156m compared to BDT140m in the corresponding period of last year. The financing cost also jumped to BDT49m from BDT25m.
 
The local industry has been pointing out that at the beginning of the current fiscal year, the government imposed a minimum of five per cent advance income tax on raw material imports for the cement industry. The tax, however, has been reduced to three per cent since 1 January, but has added additional cost to manufacturing.
 
According to HeidelbergCement Bangladesh's annual report last year, in October 2019, it established a third cement mill into operation at  its Kanchpur plant, near Dhaka. In addition, it completed the acquisition of Emirates Cement, which operates a grinding plant, in December 2019. The total cement capacity of the company reached 3.6Mt in Bangladesh.