lafarge surma's financial analysis

COMPANY REFLECTION

Lafarge Surma Cement Ltd. (LSC) was incorporated on 11 November 1997 as a private limited company in Bangladesh under the Companies Act 1994 having its registered office in Dhaka. On 20 January 2003 Lafarge Surma Cement Ltd. was made into a public limited company. The Company is listed in Dhaka and Chittagong Stock Exchange. Today, Lafarge Surma Cement Ltd. has more than 20,000 shareholders. n November 2000, the two Governments of India and Bangladesh signed a historic agreement through exchange of letters in order to support this unique cross border commercial venture and till date it is the only cross border industrial venture between the two countries. Since Bangladesh does not have any commercial deposit of limestone, the agreement provides for uninterrupted supply of limestone to the cement plant at Chhatak in Bangladesh by a 17 km long belt conveyor from the quarry located in the state of Meghalaya. The company in Bangladesh, Lafarge Surma Cement Ltd. wholly owns a subsidiary company Lafarge Umiam Mining Private Ltd. (LUMPL) being registered in India, which operates its quarry at Nongtrai in Meghalaya.

Company Background

Since Bangladesh does not have any commercial deposit of limestone, the agreement provides for uninterrupted supply of limestone to the cement plant at Chhatak in Bangladesh by a 17 km long belt conveyor from the quarry located in the state of Meghalaya. The company in Bangladesh, Lafarge Surma Cement Ltd. wholly owns a subsidiary company Lafarge Umiam Mining Private Ltd. (LUMPL) registered in India, which operates its quarry at Nongtrai in Meghalaya. The plant of Lafarge Surma Cement Ltd., with its sophisticated and state-of-theart machineries and processes started producing world class clinker and cement in 2006. This commercial venture with an investment of USD 280 million, which is one of the largest foreign investments in Bangladesh, has been financed by Lafarge of France, world leader in building materials, Cementos Molins of Spain, leading Bangladeshi business houses together with International Finance Corporation (IFC – The World Bank Group), the Asian Development Bank (ADB), German Development Bank (DEG), European Investment Bank (EIB), and the Netherlands Development Finance Company (FMO). Lafarge Group, with 176 years of experience, holds world’s top-ranking position in Cement, Aggregates, Concrete and Gypsum. It operates in 78 countries with around 78,000 employees. Lafarge is named as one of the 100 Most Sustainable Companies in the World. Cementos Molins of Spain, with 75 years of experience, also operates in Mexico, Argentina, Uruguay, and Tunisia.

Vision and Mission

Health and safety are absolute priorities for Lafarge. The Group has implemented a stringent safety policy for its employees and subcontractors. It also participates in public health programs that benefit both employees and local communities.Lafarge aims to be among the safest companies in the world and encourage safe behavior. Lafarge is the safest company in its sector. Since 2002, the Group has achieved a significant reduction in both the frequency and the gravity of work-related accidents. These improvements are due in part to the Group's Health and Safety management system, which defines the minimum safety levels required for all Lafarge sites.A great deal remains to be done to become one of the safest industrial groups in the world. For this reason, employee safety is the Group's n°1 priority.

To reach its target of zero fatal accidents and keep lost time injuries to a minimum, Lafarge:

Informs its employees and subcontractors about the risks related to their activities and provides appropriate training.

Supervises the systematic application of safety standards. Implements procedures for reporting incidents and undertakes regular audits.

Identifies and communicates best practices and drives their adoption across all worksites.

Lafarge set itself the target of significantly reducing the lost time incident frequency rate to 1.35 by 2009. This target was met and even exceeded, since the Group recorded a rate of 0.98 at the end of 2009.

Industry Analysis

Threat of new entrants: This threat is high, because-i. Product is not so much differentiated in both domestic and foreign markets.ii. Capital requirements are high.iii. Higher tax rate from government.iv. Economics of scale is mediumAlthough cost of production is high, big & foreign companies are willing to invest.

Power of buyers:Power of buyer is very much non-existent, because-1. Scattered and low volume purchase pattern of buyers2. Buyers can’t backward integrate(in source)

Power of suppliers: The powers of suppliers are high, because-1. There are many alternative buyers2. Suppliers are not scattered.3. Not so costly switching cost for the firm

Threat of substitutes:Threat of substitute is acknowledgeable, because-1. There are substitute products in the industry.2. Substitutes are undifferentiated.

Intra-industry Competitors:Although there are some competition, it is not very high, because-1. The firm is one of the main players of the market.2. The main competitor is Holcim Ltd. 3. Other competitors like- Akiz Cement Ltd., Basundhara Cement Ltd. are basically

regional or small scale, and doesn’t put much threat.4. Firm’s high capital base and foreign support makes in less vulnerable to competition.5. The firm’s products have good brand image, that help in keeping the market

position.

There exists inter industry rivalry because of investment in niche market where expected return is high. So, based on these details, we can evaluate the industry strategy of the firm based on the following scale-

Scale New entry

Buyers power

Suppliers power

Substitutes’ threats

Intra-industry competition

Total

HIGH=4 4

13Good=3 3Medium=2 2 2 2Low=1

Here the scale is used to compare the position of assigned industry, Lafarge Surma Cement Ltd. In the existing market.

Production Performance

From February 5, 2010 up to first week of August 2011, there was no supply of limestone from the Company’s mine in Meghalaya, India due to forest issue. As a result, during the first seven months of 2011, there was no production of clinker by the Company and the Company continued limited production of cement with imported clinkers. During that part of the year the Company successfully maintained its Brand presence in Bangladesh market, which is very important from a business strategic stand point.

Pursuant to the Indian Supreme Court order, the Plant started receiving limestone from its mine in Meghalaya, India from August 7, 2011. After building up of some limestone stock, full clinker production in your Plant resumed from August 13, 2011 and was stabilized very quickly. Cement production with your Company’s own clinker started immediately thereafter. Restart of the clinker production without any major hiccup after such a long gapwas possible because of proactive and visionary strategy by the Company.During 2011, clinker production was 485 KT (for part of the year), cement production was 885 KT and cement sales was 869 KT. While in 2010, clinker production was 385 KT (for part of the year), cement production was 925 KT and cement sales was 922 KT.

Efforts were continued to reduce cost by improving plant performance and “cement–over clinker” ratio progressively from 1.47 to 1.58.

Commercial Performance:

This Company could not operate fully in 2011 due to disruption in supply of limestone for the forest issue. During this time, the Company continued production of cement in a limited scale through imported clinker. As a result, the sales volume was affected during January to August 2011. The Company resumed its supply of limestone in August 2011 and started producing cement from its own clinker. Having re-started production and sales in full swing, the Company has, grown month on month at an average growth rate of 30% since August 2011 to February 2012.The Company started the year 2012 with a lot of enthusiasm backed up by strong business results. In January 2012 we recorded sales of 141,183 tonnes of cement, breaking all previous sales records, in the history of your Company.Meanwhile, this Company took a number of price initiatives to improve the product prices in the marketplace. This has strengthened your Company’s P&L and also SUPERCRETE’s premium position in the market.This Company is working on continuous improvement of sales and distribution system in order to reach the most profitable markets in Bangladesh in the most cost effective and efficient manner. Recently, your Company has introduced a coaching template for continuous performance improvement.

The consistency in quality as usual, remains one of our major endeavours and the customers’ testimony of SUPERCRETE’s perception as a high quality cement, is nurtured.

In March 2012, the Company re-launched its brand communication of SUPERCRETE with deeper link into Company’s Global expertise and testimony. Its brand, SUPERCRETE, also went through a make-over into a new attractive globally-aligned pack design followed by a mass awareness campaign through print and outdoor media.

We are also revamping and restructuring the strategy for the “Influencer” campaign through “Opinion Leaders” workshops and endorsement activities. We believe, this is a journey to a new beginning for SUPERCRETE for much higher brand values and equity.

SUPERCRETE has been used in more and more prestigious projects in 2011. For instance, Korean Export Processing Zone, 350 MW Power Station at Katakhali, Rajshahi, Abdul Monem Building District in Dhaka, New Bangla Academy Building and East West University Dhaka Campus are few prestigious, large and SUPERCRETEEXCLUSIVE projects that your Company is proud of.

Given the structural advantages over others and its ability to serve the customers better being part of global leaders in cement, the Company is expected to secure the desired market share quickly and run its business profitably.The Consolidated Balance Sheets and Income Statements of previous 5 years of Lafarge Surma Cement Ltd. are given below for consideration:

Background and Recent performanceof

Crown Cement Limited

M. I. Cement Factory Ltd. is a public limited company and one of the leading manufacturers of cement in Bangladesh. On December 31, 1994 it started its journey with the commitment for providing high quality cement to the country. Its brand "Crown Cement" has own renown both at home and abroad.Initially the plant was installed with a capacity of producing 600tpd (ton per day) of Portland cement. With the passing of time the demand of Crown Cement increased day by day. Therefore the sponsors expanded the project thrice. By dint of quality Crown Cement soon gained acceptability both at home and abroad which raised the necessity for expanding the plant from initial 600tpd (ton per day), 800tpd 2nd unit in 2002, 1400tpd 3rd unit in 2006 and 3000tpd 4th unit in 2011 thereby raising the total production capacity to 5800tpd i.e. 1.740 million metric ton per annum.The company has been listed in Dhaka Stock Exchange and Chittagong Stock Exchange in 2011. Its high growth agenda have been highly appreciated by the shareholders, and have won investors trust. Its backward and forward integration endeavors have given new dimensions to its growth platform. With this end in view, the associate industrial units' viz., Crown Polymer Bagging Ltd., Crown Power Generation Ltd., Crown Mariners Ltd., Crown

Transportation & Logistics Ltd., Crown Cement Concrete & Building Materials Ltd. have been set up and are already in operation. The company has also acquired a handy max size ocean going ship to facilitate transportation of raw materials from abroad. It is hopefully expected that these new growth platforms will facilitate creation of new dimensions and frontiers to the mother company M. I. Cement Factory Limited.Crown Cement pioneered in export of cement in 2003 and paved the way for earning hard-earned foreign currency. Recently Crown Cement Achieved the National Export Trophy (Gold) twice for attaining the top most place among the cement exporters in Bangladesh.The factory possesses well communications facility both through water and road. It is located as West Mukterpur, Munshigonj on the bank of the river Dhaleswari. It is connected by a metallic road (Dhaka-Munshigonj Highway) linked with the whole country.

Background and Recent performanceOf

Confidence cement Ltd

1991, the journey had begun with the name called Confidence Cement Limited. By holding a vision throughout the business merged into larger entity called CONFIDENCE GROUP. Now the organization is one of the top most conglomerates in Bangladesh involved in manufacturing Innovative Mid-tech Engineering Products with all its excellence. The organization largely believes in contributing to the development of the nation and it is evolving accordingly with all its strength and vision.Owning 8 different SBUs; Confidence Group keeps on delivering its promises maintaining the best quality product range such as- Cement, Paint, Power Generation, Spun Pre-stressed Concrete (SPC) Poles, Galvanized Telescopic Steel Poles, Machineries, Gear-box for Water Pumps, Screws and Fasteners, Steel Lattice Towers, Portable Steel Bridge, Pole Fittings and Hardware, Telecommunication etc.The group includes different wings of specialized business entities to produce different category products. Each and every of them are highly competent to operate the assigned activates.

Background and Recent performanceOf

Heidelberg Cement Limited

In more than 40 countries across the world, the name Heidelberg Cement stands for competency and quality. Heidelberg Cement is the global market leader in aggregates and a prominent player in the fields of cement, concrete, and other downstream activities, making it one of the world’s largest manufacturers of building materials. In 2012, Group revenue amounted to €14.0 billion. The core activities of Heidelberg Cement include the production

and distribution of cement and aggregates, the two essential raw materials for concrete. We supplement our product range with downstream activities such as ready-mixed concrete, concrete products, and concrete elements, as well as other related products and services. Around 52,000 employees in more than 2,500 locations make sure on a daily basis that our slogan”for better building“is brought to life. Heidelberg Cement has come a long way from the foundation of the first cement plant in Heidelberg in 1873 to one of the leading international building materials group it is today. The company was active in the South German region until the end of the 1960s. First steps into the international area with the participation in the French cement company and the acquisition of high Cement in the USA in 1977. At the end of the 1980s, the political changes offered new opportunities and Heidelberg Cement became the largest investor in the building materials industry of the region. In the 1990s, the international expansion accelerated. The entrance into Indonesia followed in 2001 and again created a significant increase in capacity. Our objective”Priority for growing markets“was the driving force behind our engagements in China, India, Kazakhstan, Georgia, the Ukraine, and Russia over the last several years. By making the biggest acquisition in the building materials industry – the takeover of the building materials manufacturer Hanson in 2007 – we have expanded and consolidated our position among the leading companies.

Performance

In 1998 Heidelberg Cement Group established its presence in Bangladesh by setting up a floating terminal with on board bagging facilities in the port of Chittagong and by distributing the cement to the key markets of Dhaka and Chittagong. In 1999 the group further strengthened its position in Bangladesh and built a green field manufacturing plant near Dhaka namely “Scan cement International Limited” with an installed capacity of 0.750 million tons per year. In 2000 Heidelberg Cement group also bought a minority position in Chittagong based company namely “Chittagong Cement Clinker Gliding Co. Limited (CCCGCL)” quickly followed by the acquisition of a in controlling stake. The plant in Chittagong has an installed capacity of 0.7 million ton per year. In 2003, the two companies were amalgamated and the company’s name was changed to Heidelberg Cement Bangladesh Limited Heidelberg Cement Bangladesh Ltd., one of the leading Bangladesh cement producers, operates two cement-grinding plants in Dhaka and in Chittagong, The cement plants are powered by separate power plants in both locations. In 2003 Wärtsilä delivered a natural gas engine that upgraded the Heidelberg’s Chittagong’s power plant’s capacity to 6 MW.

Lafarge Surma Cement Ltd.Balance Sheet

Lafarge Surma Cement Ltd.Income Statement

OVERVIEW OF CURRENT ASSETS & CURRENT LIABILITIES

CURRENT ASSETS

Inventories 1092184 1251579 1146423 1572777 1659520Trade receivables 703932 388088 133171 533487 711629Other receivables 0 0 861882 1078870 1442056Derivative instruments 1960 869 1429 19855 0Advances, deposits and prepayments

701645 665455 0 0 0

Cash and cash equivalents 69547 87401 174691 245432 154160TOTAL CURRENT ASSETS 2569268 2393392 2317596 3450421 3967365

CURRENT LIABILITIES

Trade payables 843429 1180470 1462654 1788339 1945520

Other payables 594100 606199 390035 348021 473595Derivative instruments 79691 1117 0 43317 7641Bank overdrafts 1628004 675961 633261 0 0Short-term debt 3100862 3517578 5680768 3102588 3063221Current portion of long term debt 1717614 1741992 2017604 2763900 2838908Current income tax liabilities 2629 1251 1251 62147 115592TOTAL CURRENT LIABILITIES

7966329 7724568 10185573 8108312 8444477

Prospective Analysis:

PRO FORMA INCOME STATEMENTREVENUE Will grow at 20%, based on historical growth rate.Cost of Sales 73% of sells, as a percentage of sells.GROSS PROFIT Deviation between revenue and cost of sales.General and administrative expense Based on percentage on sales.Sales and marketing expenses Multiplicative value of operating cost with 80%.Other operating expense/income No amount for this company.OPERATING INCOME/LOSS Additive value from gross profit to sales expense.Exchange(loss)/gain on foreigncurrency transaction

Will remain unchanged.

Finance cost Finance cost is calculated based on project loan, specifying interest rate which is repayable in half yearly installments ending by 2012 (specified on the annual report-2012).

Finance income Forecasted income tax is calculated in accordance with the requirements of BAS 12: Income Tax. Thus the applicable tax rate is 37.5% because the company qualified as a “Public Traded Company”

Other expenses Will remain unchanged.Contribution to workers’ profitParticipation & welfare funds

In case of welfare fund, the act of the Bangladesh Labor Law is followed. It is 5% of net profit before tax.

NET LOSS BEFORE TAX Additive value from Operating income/expense to contribution to welfare.

Income tax Income tax has prescribed 37.5% for our company.NET LOSS AFTER TAX Deviation of Net loss before tax & Income tax.

Trend analysis of Lafarge Surma Cement Limited

Year 2008 2009 2010 2011 2012Current ratio

0.32 0.31 0.23 0.43 0.47

Formula: Current Ratio=

Comment: Though in 2008 to 2010 our company’s liquidation position was poor but it has increased significantly in 2011 and 2012.

Formula: Quick Ratio=

Year 2008 2009 2010 2011 2012Quick ratio 0.19 0.15 0.11 0.23 0.27

0.000.050.100.150.200.250.300.350.400.450.50

2008 2009 2010 2011 2012

Current Ratio

Current Ratio

Comment: Our company’s quick ratio position is good in 2011 and 2012.

Year 2008 2009 2010 2011 2012Inventory turnover

3.40 3.72 4.43 3.52 3.89

Formula: Inventory Turnover =

0.00

0.05

0.10

0.15

0.20

0.25

0.30

2008 2009 2010 2011 2012

Quick Ratio

Quick Ratio

Comment: It measures the activity or liquidity of a firm’s inventory. Our inventory turnover ratio fluctuates in several years.

Year 2008 2009 2010 2011 2012Average collection period

4.08 1.85 0.85 3.15 2.41

Accounts Receivable × 360Formula: Average collection period = Annual Sales

0.000.501.001.502.002.503.003.504.004.505.00

2008 2009 2010 2011 2012

Inventory Turnover

Inventory Turnover

Comment: It indicates in evaluating credit and collection policies. . our company’s average collection period is 4-2 days which indicate Stringent credit terms and different sales.

Year 2008 2009 2010 2011 2012

Fixed asset turnover

4.07 5.06 3.63 4.04 7.31

Formula: Sales / Fixed Asset

0.000.501.001.502.002.503.003.504.004.50

2008 2009 2010 2011 2012

Average Collection Period


Comment: Our fixed Asset Turnover Ratio is increasing day by day.

Year 2008 2009 2010 2011 2012

Total asset turnover

3.48 4.36 3.16 3.29 5.74

Formula: Sales / Total Asset

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2008 2009 2010 2011 2012

Fixed Asset Turnover


Comment: Our Total Asset Turnover Ratio was fluctuating up to 2011 but in 2012 it’s increasing. That indicates our firm has more efficiency to use total asset.

Year 2008 2009 2010 2011 2012Debt ratio 0.81 0.74 0.85 0.65 0.55

Formula: Debt Ratio =

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2008 2009 2010 2011 2012

Total Asset Turnover


Comment: Our company’s debt ratio is not satisfactory. It was fluctuating up to 2010 and it’s decreasing in 2012.

Year 2008 2009 2010 2011 2012Debt to equity

1.87 1.06 1.70 0.61 0.11

0.000.100.200.300.400.500.600.700.800.90

2008 2009 2010 2011 2012

Debt Ratio

Debt Ratio

Formula: Debt-to-Equity =

Comment: Our company’s debt equity ratio is fluctuating and decreasing year by year.

Year2008 2009 2010 2011 2012

Times interest

-47.37 -80.70 -65.66 -41.27 -119.50

0.000.200.400.600.801.001.201.401.601.802.00

2008 2009 2010 2011 2012

Debt-to-Equity

Debt-to-Equity

earned

Comment: Our company’s time interest earned ratio is badly decreasing year by year. So the time interest earned ratio for our company seems dissatisfactory and indicate interest expense payable ability is poor.

Year 2008 2009 2010 2011 2012

Gross profit 94.02% 93.83% 91.02% 90.92% 93.94%

-140.00

-120.00

-100.00

-80.00

-60.00

-40.00

-20.00

0.00

2008 2009 2010 2011 2012

Times Interest Earned


margin

Formula: Gross Profit Margin=

Comment: Our company’s Gross Profit Margin ratio is not stable. It’s fluctuating.

Year 2008 2009 2010 2011 2012

Operating 93.36% 93.17% 88.03% 90.34% 93.14%

89.00%89.50%90.00%90.50%91.00%91.50%92.00%92.50%93.00%93.50%94.00%94.50%

2008 2009 2010 2011 2012

Gross Profit Margin

Gross Profit Margin

profit margin

Formula: Operating Profit Margin=

Comment: Year by year company’s operating profit margin is fluctuating. So our company’s risk is high.

Year 2008 2009 2010 2011 2012

85.00%86.00%87.00%88.00%89.00%90.00%91.00%92.00%93.00%94.00%

2008 2009 2010 2011 2012

Operating Profit Margin


Net profit margin

90.28% 91.32% 87.14% 86.41% 91.74%

Formula: Current Ratio=

Comment: Year by year company’s operating profit margin is fluctuating. So our company’s risk is high.

83.00%84.00%85.00%86.00%87.00%88.00%89.00%90.00%91.00%92.00%93.00%

2008 2009 2010 2011 2012

Net Profit Margin

Net Profit Margin

Year 2008 2009 2010 2011 2012

Return on total asset 31.45% 39.84% 27.50% 28.39% 52.69%

Formula: Return on Total Assets =

Comment: The return on total asset ratio relates the firms earnings to the capital employed. Higher the ratio, higher earnings. Our company’s return on total asset is fluctuating year by year.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2008 2009 2010 2011 2012

Return on Total Assets (ROA)


Year 2008 2009 2010 2011 2012

Return on equity 16.36% 15.45% 17.79% 8.19% 11.64%

Formula: Return on Equity=

Comment: Year by year our company’s return non equity is fluctuating.

0.00%2.00%4.00%6.00%8.00%

10.00%12.00%14.00%16.00%18.00%20.00%

2008 2009 2010 2011 2012

Return on Equity (ROE)


Year 2008 2009 2010 2011 2012

Earning per share 9.66 11.86 8.49 4.55 8.41

Formula: Earnings Per Share =

Comment: The earnings per share represents the number of amounts earned during the period on behalf of each outstanding share of common stock. Year by year our company’s earnings per share is fluctuating.

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

2008 2009 2010 2011 2012

Earnings Per Share (EPS)


Year 2008 2009 2010 2011 2012

Earning ratio53.12 42.57 66.43 5.84 3.91

Formula: Price/earnings Ratio=

Comment: The higher the price- earnings ratio, the greater is investor confidence. Year by year our company’s price- earnings ratio is decreasing.

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

2008 2009 2010 2011 2012

Price/ Earnings Ratio


Year 2008 2009 2010 2011 2012

ROA31.45% 39.84% 27.50% 28.39% 52.69%

Formula: Return on Total Assets =

Comment:

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2008 2009 2010 2011 2012

ROA

ROA

Year 2008 2009 2010 2011 2012

ROE16.36% 15.45% 17.79% 8.19% 11.64%

Formula: Return on Equity=

Comment:

0.00%2.00%4.00%6.00%8.00%

10.00%12.00%14.00%16.00%18.00%20.00%

2008 2009 2010 2011 2012

ROE

ROE

Trend Analysis of Crown Cement Limited

Current Ratio:

Quick Ratio:

0.000.501.001.502.002.503.003.504.004.50

2008 2009 2010 2011 2012

Current Ratio

Current Ratio

Inventory Turnover:

Average collection period:

0.000.501.001.502.002.503.003.504.00

2008 2009 2010 2011 2012

Quick Ratio

Quick Ratio

0.00

2.00

4.00

6.00

8.00

10.00

12.00

2008 2009 2010 2011 2012

Inventory Turnover

Inventory Turnover

Fixed asset turnover:


0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2008 2009 2010 2011 2012



0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2008 2009 2010 2011 2012



Debt ratio:

Debt to Equity:

0.002.004.006.008.00

10.0012.0014.0016.00

2008 2009 2010 2011 2012



0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

2008 2009 2010 2011 2012

Debt Ratio

Debt Ratio

Times Interest Earned:

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

2008 2009 2010 2011 2012

Debt-to-Equity

Debt-to-Equity

-3000.00

-2000.00

-1000.00

0.00

1000.00

2000.00

3000.00

4000.00

2008 2009 2010 2011 2012



Gross profit margin:

Operating profit margin

Net profit margin:

90.40%90.60%90.80%91.00%91.20%91.40%91.60%91.80%92.00%92.20%92.40%

2008 2009 2010 2011 2012

Gross Profit Margin

Gross Profit Margin

90.60%

90.80%

91.00%

91.20%

91.40%

91.60%

91.80%

92.00%

2008 2009 2010 2011 2012



Return on total asset:

Return on equity:

90.00%

90.50%

91.00%

91.50%

92.00%

92.50%

93.00%

2008 2009 2010 2011 2012

Net Profit Margin

Net Profit Margin

0.00%200.00%400.00%600.00%800.00%

1000.00%1200.00%1400.00%1600.00%

2008 2009 2010 2011 2012



Earnings Per Share:

Price Earning Ratio:

0.00%

500.00%

1000.00%

1500.00%

2000.00%

2500.00%

3000.00%

3500.00%

2008 2009 2010 2011 2012



0.00

2.00

4.00

6.00

8.00

10.00

12.00

2008 2009 2010 2011 2012



ROE:

0.00

10.00

20.00

30.00

40.00

50.00

60.00

2008 2009 2010 2011 2012



Trend Analysis of Confidence Cement Limited

Current Ratio:

0.00%

500.00%

1000.00%

1500.00%

2000.00%

2500.00%

3000.00%

3500.00%

2008 2009 2010 2011 2012

ROE

ROE

0.000.501.001.502.002.503.003.504.004.50

2008 2009 2010 2011 2012

Current Ratio

Current Ratio

Quick Ratio:

Inventory Turnover:


0.00

0.50

1.00

1.50

2.00

2.50

3.00

2008 2009 2010 2011 2012

Quick Ratio

Quick Ratio

0.001.002.003.004.005.006.007.008.00

2008 2009 2010 2011 2012

Inventory Turnover

Inventory Turnover



0.00

10.00

20.00

30.00

40.00

50.00

60.00

2008 2009 2010 2011 2012



0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2008 2009 2010 2011 2012



Debt ratio:

Debt to equity:

0.000.100.200.300.400.500.600.700.800.90

2008 2009 2010 2011 2012



0.000.100.200.300.400.500.600.700.800.90

2008 2009 2010 2011 2012

Debt Ratio

Debt Ratio

Times Interest Earned:


0.000.200.400.600.801.001.201.401.601.802.00

2008 2009 2010 2011 2012

Debt-to-Equity

Debt-to-Equity

-25.00

-20.00

-15.00

-10.00

-5.00

0.002008 2009 2010 2011 2012




Net profit margin:

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%

2008 2009 2010 2011 2012

Gross Profit Margin

Gross Profit Margin

0.00%20.00%40.00%60.00%80.00%

100.00%120.00%140.00%160.00%180.00%

2008 2009 2010 2011 2012




Return on equity:

0.00%20.00%40.00%60.00%80.00%

100.00%120.00%140.00%160.00%

2008 2009 2010 2011 2012

Net Profit Margin

Net Profit Margin

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2008 2009 2010 2011 2012



Earnings Per Share:

Price/ Earning ratio:

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%

2008 2009 2010 2011 2012



0.005.00

10.0015.0020.0025.0030.0035.0040.0045.0050.00

2008 2009 2010 2011 2012



ROA:

ROE:

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

2008 2009 2010 2011 2012



0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2008 2009 2010 2011 2012

ROA

ROA

Trend analysis of Heidelburg Cement Limited

Current Ratio:

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%

2008 2009 2010 2011 2012

ROE

ROE

Quick Ratio:

Inventory Turnover:

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2008 2009 2010 2011 2012

Current Ratio

Current Ratio

0.00

0.50

1.00

1.50

2.00

2.50

2008 2009 2010 2011 2012

Quick Ratio

Quick Ratio



0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2008 2009 2010 2011 2012

Inventory Turnover

Inventory Turnover

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2008 2009 2010 2011 2012




Debt ratio:

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2008 2009 2010 2011 2012



9.50

10.00

10.50

11.00

11.50

12.00

12.50

2008 2009 2010 2011 2012



Debt to equity:


0.000.050.100.150.200.250.300.350.400.450.50

2008 2009 2010 2011 2012

Debt Ratio

Debt Ratio

0.000.000.000.000.000.000.000.000.000.00

2008 2009 2010 2011 2012

Debt-to-Equity

Debt-to-Equity


Net profit margin:

91.00%

91.20%

91.40%

91.60%

91.80%

92.00%

92.20%

92.40%

92.60%

2008 2009 2010 2011 2012

Gross Profit Margin

Gross Profit Margin

90.40%90.60%90.80%91.00%91.20%91.40%91.60%91.80%92.00%92.20%

2008 2009 2010 2011 2012




Return on equity:

90.70%

90.80%

90.90%

91.00%

91.10%

91.20%

91.30%

2008 2009 2010 2011 2012

Net Profit Margin

Net Profit Margin

900.00%920.00%940.00%960.00%980.00%

1000.00%1020.00%1040.00%1060.00%1080.00%1100.00%

2008 2009 2010 2011 2012



Earning per share:

Price/ Earning ratio:

1300.00%1350.00%1400.00%1450.00%1500.00%1550.00%1600.00%1650.00%1700.00%1750.00%1800.00%

2008 2009 2010 2011 2012



0.002.004.006.008.00

10.0012.0014.0016.0018.0020.00

2008 2009 2010 2011 2012



Dupont Analysis:

ROA:

ROE:

0.002000.004000.006000.008000.00

10000.0012000.0014000.0016000.0018000.0020000.00

2008 2009 2010 2011 2012



900.00%920.00%940.00%960.00%980.00%

1000.00%1020.00%1040.00%1060.00%1080.00%1100.00%

2008 2009 2010 2011 2012

ROA

ROA

Cross sectional analysis

Ratio Lafarge Surma cement

Crown cement

Confidence cement

Heidelberg cement

Industry average

Current Ratio 0.47 2.25 1.30 2.64 1.665Quick Ratio 0.27 2.08 0.99 2.08 1.355Inventory turnover

3.89 11.10 7.52 7.41 7.48

Average collection period

2.41 4.80 49.06 3.04 14.8275


7.31 13.31 0.37 30.77 12.94


5.74 5.71 0.02 11.86 5.83


-119.50 -1850.28 -5.70 -57.06 -508.135

1300.00%1350.00%1400.00%1450.00%1500.00%1550.00%1600.00%1650.00%1700.00%1750.00%1800.00%

2008 2009 2010 2011 2012

ROE

ROE

Debt Ratio 0.55 0.45 0.37 .31 0.42

Debt-to-Equity 0.11 0.33 .02 0.00 0.16

Gross Profit Margin

93.94% 91.33% 17.17% 91.43% 73.4675%


93.14% 91.02% 14.23% 91.19% 72.395%

Net Profit Margin

91.74% 90.89% 3.08% 1081.06% 316.6925%


52.69% 518.62% 2.46% 1575.51% 537.32%


11.64% 945.62% 3.94% 17.57% 305.14525%

Earnings Per Share

8.41 3.81 8.67 15.07 8.99

Price/Earnings Ratio

3.91 8.64 3.80 6.02 5.5925

Comment: The above graph represents the poor current payable ability of our company compare to other industry average.

Comment: The graph represents poor quick payable ability of our company compare to other industry average.

Comment: The graph represents poor turnover ratio of our company compare to industry average.

Comment: The graph represents lower average collection period in compare to industry average.

Comment: The graph represents lowerer fixed asset turnover ratio in compare to industry average.

Comment: The graph represents higher debt ratio of our company in compare to industry average.

Comment: the graph represents lower debt to equity ratio of our company in compare to industry average.

Comment: The graph represents higher gross margin ratio of our company in compare to industry average.

Comment: The graph represents operating margin ratio of our company in compare to industry average.

Comment: The graph represents lower net profit margin of our company in compare to industry average.

Comment: The graph represents higher return on total asset of our company in compare to industry average.

Comment: The graph represents lower return on equity of our company in compare to industry average.

Comment: The graph represents higher earning per share of our company in compare to industry average.

Comment: The graph represents lower earning ratio of our company in compare to industry average.

Working Capital Balances (2008 to 2012)

2008 2009 2010 2011 2012Sales 6,211,938,000.00 7,543,725,000.00 5,655,374,000.00 6,098,478,000.00 10,640,061,000.00% of sales(current asset) 0.41 0.32 0.41 0.57 0.37 % of sales(current liability) 1.28 1.02 1.80 1.33 0.79 Total Current Assets: 2,569,268,000.00 2,393,392,000.00 2,317,596,000.00 3,450,421,000.00 3,967,365,000.00 Total Current liability 7,966,329,000.00 7,724,568,000.00 10,185,573,000.00 8,108,312,000.00 8,444,477,000.00Working capital (5,397,061,000.00) (5,331,176,000.00) (7,867,977,000.00) (4,657,891,000.00) (4,477,112,000.00) Change in working capital 65,885,000.00 (2,536,801,000.00) 3,210,086,000.00 180,779,000.00

Conclusion

Lafarge Surma Cement is a venture of Lafarge and Cementos Molins. Lafarge is the world leader in building materials with top-ranking positions in its Cement, Aggregates & Concrete businesses. It has more than 176 years of experience and operates in 64 countries with around 68,000 employees. Since 2010, the Lafarge Group has been part of the Dow Jones Sustainability World Index, in recognition of its sustainable development actions. Cementos Molins is a family owned Spanish Company with more than 80 years of experience. Apart from its operation in Spain, it has operations in Bangladesh, Argentina, Uruguay, Mexico, and Tunisia, controlling 16 million tons of cement.

References:

i. Lafarge Surma Cement Ltd. Head Office (Suvastu Imam Square, 65 Gulshan Avenue, 3rd floor, Gulshan 1)

ii. www.lafarge-bd.com

iii. Annual Reports of Lafarge Surma Cement Ltd. (From 2007 to 2012)

iv. Gitman; Lawrance J.; Principles of Managerial Finance 12th Edition.

v. Ross; Westerfield; Jaffe; Corporate Finance 7th Edition.

vi. Madura; Financial Markets and Institutions 5th Edition.

vii. Thompson; Stickland; Gamble; Crafting and Executing Strategy 17th Edition.

viii. Market Share Records of Lafarge Surma Cement Limited collected from Dhaka Stock Exchange (DSE).

ix. Google search

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lafarge surma's financial analysis

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