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Lucky Cement shares financial results

Published by , Deputy Editor
World Cement,

On a consolidated basis, Lucky Cement Limited has reported the highest profit after tax to date of PKR 22.15 billion of which PKR 3.93 billion is attributable to non-controlling interests for the nine months ended 31 March 2021. This translates into earnings per share (EPS) of PKR 56.36/share as compared to PKR 14.38 / share reported during the same period last year.

Further, on a consolidated basis, the company achieved gross turnover of PKR 202.46 billion which is 63% higher as compared to the same period last year’s turnover of PKR 123.99 billion. During the 9M 2020 – 21 under review, the company’s consolidated net profit (attributable to owners’ of the holding company) increased by 292% as compared to the same period last year. The increase in Net Profit was mainly attributable to an increase in profitability of the cement segment which grew by three times due to higher turnover and better efficiencies from a new line at North. The increase in the consolidated Net Profit was further supported by considerable increase in Net Profit of Lucky Motor Corporation, which reported a revenue of 3.5 times the revenue of corresponding period. The other subsidiaries, ICI Pakistan Limited and LCL Investment Holdings Limited also posted significant increase in profitability mainly attributable to growth in sales revenue.

On a standalone basis, the company’s overall sales volumes posted a high double digit growth of 31.1% to reach 7.61 million tons during 9M 2020 – 21. The local sales volumes grew by 38.8% to reach 5.71 million tons in comparison to 4.11 million tons during the same period last year. Also, the export sales volumes of the company increased by 12.3% to 1.90 million tons as compared to 1.69 million tons during the same period last year.

The increase in the company’s local sales volume during the period under review is mainly due to availability of new capacity in Pezu and significant growth in the cement demand triggered by upsurge in economic activities especially in the north. Moreover, growth in export sales volume is mainly due to higher exports of loose cement owing to an effective push by the company, keeping in view the better margins and its unique position to make such sales.

Further, with regards to the company’s standalone financial performance, the gross sales revenue increased by 37.9% to PKR 66.13 billion compared to PKR 47.95 billion reported during the same period last year. The per ton cost of sales also decreased mainly due to better absorption of fixed cost as a result of increase in volumes and efficiencies achieved from new production line in the north. Lucky Cement recorded net profit after tax of PKR 11.69 billion. Similarly, the standalone EPS of the company is PKR 36.14/share as compared to the same period last year’s reported EPS of PKR 9.08/share.

The company reported progress on its brownfield plant expansion activities in KPK with project completion targeted for December 2022. Further, Greenfield cement production facility in Samawah, Iraq successfully completed its trial production and commenced commercial operations from March 2021.

The company also reported that its 1 X 660 MW supercritical coal-based power project at Port Qasim will achieve completion status of approximately 97.5% by end of this quarter. Based on the current level of readiness by NTDC for providing interconnection facility and the government’s support, it appears that the project will achieve its Commercial Operation by the middle of the first quarter FY 2022 (July to September 2021).

Lucky Cement continues its patronage on education, female empowerment, and health and has reassured its commitment to the development of society and the communities in which the company operates.

Lucky Cement expects that in view of a hike in infection rates from the third wave of Covid-19, if the Government imposes micro/smart lock-downs in major cities, then the cement demand will be affected in the short term. The company also believes that the package announced by the Federal Government for the construction industry coupled with various initiatives taken by State Bank of Pakistan to support the housing sector and the commencement of new housing projects under Naya Pakistan Housing (NPHP) scheme will have a positive impact on the local demand of cement in the country in the medium to long term. New FDI inflows are also expected in CPEC projects, which will result in increased cement demand. The company also showed its concern that there will be a pressure on margins due to rising coal and furnace oil prices.

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