KARACHI:
Lucky Cement has managed to double its half-yearly profits despite production levels remaining virtually unchanged.
Net profit rose 107% to Rs3.02 billion during July to December 2011 against Rs1.46 billion in the same period a year back, according to a notice sent to the Karachi Stock Exchange on Tuesday.
“Earnings growth resulted from a 24% uptick in cement prices and the company’s shift in focus to the local market,” said AKD Securities analyst Misbah Iqbal. Consequently, gross margin increased to 38% in the period under review against the preceding year’s 33%.
The country’s second largest cement manufacturer has gradually increased its local share rather than exports as all-time high local cement prices make it a more lucrative destination.
Net sales rose by 28% to Rs15.37 billion in the first half of 2012 against Rs12.03 billion posted in the same period last year. The stunning boost in monetary sales was mainly because of higher retention prices.
Volumetric sales grew by meagre 2% to 2.87 million tons against 2.81 million in the same period last year, whereas price surged 25% to Rs423 per bag against Rs339 per bag during the same period last year, according to Summit Capital.
The company’s tire derived fuel plant has started trial operations in December and should start operating commercially by next month, adds the notice. The plant would utilise disposed shredded tires as a replacement of coal for cement production.
The plants costing Rs1 billion is capable of producing cheaper cement along with reducing significant carbon emissions in the environment.
Furthermore, the work on installation of grid station and interconnection with distribution network of Hyderabad Electric Supply Company is in progress and is expected to be completed within July to September 2012.
Published in The Express Tribune, January 31st, 2012
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