Corporate results: Lucky Cement profits up 27%

Lucky announced plans to set up a one-million-ton manufacturing plant in Congo under a joint venture project.

KARACHI:

Lucky Cement profits grew 27 per cent to Rs3.97 billion in financial year 2011 despite a decrease in volumetric sales.

The earnings have increased because of better selling price in the local market and efficient coal inventory management, said IGI Securities senior analyst Sana Abdullah.

Alongside the result, the company announced a cash dividend of Rs4 per ordinary share of Rs10, according to a notice sent to the Karachi Stock Exchange on Monday.

The company also announced plans to set up a one-million-ton manufacturing plant in Congo under a joint venture project, which is probably the reason for lower-than-expected cash dividend, added Abdullah.

Lucky Cement will contribute $40 million to the 50% share of its equity in the project. Total cost is estimated at $175 million, of which 46% will be contributed by both partners while the rest will be raised from financial institutions.

Volumetric sales declined 12% to 5.82 million tons in the period under review against 6.63 million tons last year. The main reason behind the decline in dispatches was 33% fall in exports, however, with the company shifting its focus to the domestic market, local dispatches rose 11% on a yearly basis.

Despite lower volumetric sales, sales revenue of the company posted a 6% growth to Rs31.7 billion on the back of 32% higher average selling price.

Moreover, distribution cost declined 6% because of lower exports as well as 9% lower financial charges, which was the driving force behind the earnings, according to analysts.





Published in The Express Tribune, August 2^nd, 2011.