LafargeHolcim resumes business in aggregates since HC stay order
Prior to the ministry’s order, a high powered government committee found the company was crushing aggregates at an unapproved facility in Chhatak, Sunamganj
LafargeHolcim Bangladesh Ltd has resumed its business of crushing and selling aggregates derived from imported lime stones coming from its Meghalaya mines.
On Tuesday, the High Court issued a one-month stay order on the Ministry of Industries letter of 16 September that asked the cement maker to stop crushing aggregates.
Prior to the ministry's order, a high powered government committee found the company was crushing aggregates at an unapproved facility in Chhatak, Sunamganj.
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The ministry launched its investigation based on complaints from local aggregates crushers and merchants arguing that LafargeHolcim is doing this business with an unfair advantage in taxes and duties.
The listed cement company began crushing and selling aggregates in January and following that, its profits began to increase.
Analysts said the aggregates business was contributing to around one-fifth of the company's revenue for the first nine months of 2020 and making at least one-third of the company's profits over the same period.
Following the news regarding the closure of LafargeHolcim's most profitable aggregates business, it stopped rallying in the Dhaka Stock Exchange and saw a sharp market correction.
In five weeks, its stock price dropped below Tk75 each from a six-year high of Tk107.
However, when the company filed its writ petition against the ministry order, its nine months earnings grew year-on-year, and also as there is a strong possibility of share transfer deals between the company's foreign sponsors and new investors, LafargeHolcim's stock has recovered somewhat in the last two weeks and closed at Tk81.9 per share on Wednesday.
The company posted Tk0.81 in earnings per share for the July-September quarter, which was Tk0.56 in the same quarter last year, excluding earnings from the profitable business of aggregates.
Now, analysts are curious to see if LagargeHolcim's cement business can in the ongoing quarter, offset the lost aggregates revenue of more than a month.
