Lucky Cement’s profit dives 36% to Rs3.9b

EPS stands at Rs9.93 in half-year period

Representational image. PHOTO: REUTERS

KARACHI:
Lucky Cement’s earnings dropped 36.1% to Rs3.9 billion in the half year ended December 31, 2019 as gross profit margins of the company have recently been hit by pricing pressure.

The company had reported earnings of Rs6.1 billion in the same period of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Thursday.

The company reported earnings per share of Rs9.93 in the period under review compared to Rs17.92 in the same period of previous year.

According to a Topline Securities’ report, the results were above their expectations primarily due to higher other income. Lucky Cement reported revenue of Rs79.6 billion in the July-December period of 2019, up 17% from Rs67.8 billion in the previous year.

However, gross profit dropped from Rs11.7 billion in 2018 to Rs9.6 billion in the period under review.


“Core cement segment sales were down by 10.9% year-on-year for 1HFY20, mainly on the back of lower volumetric sales by 8.4% year-on-year and intense pricing which, in turn, was due to lower demand and higher transport and logistics costs,” the report added.

Core cement margins declined by 15 percentage points year-on-year primarily due to intense competition in the northern region along with rising cost pressures.

Meanwhile, finance cost of the company soared by a significant 53% to Rs1.2 billion in the period under review.

On the other hand, other income of the company was up 45% on a year-on-year basis to Rs2.8 billion in the half-year period due to higher profitability from international operations. Lucky Cement’s share price increased Rs11.27, or 2.37%, to Rs487.35 with trading in 832,900 shares at the PSX.

Published in The Express Tribune, January 31st, 2020.

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