Lucky Cement announces Rs4 per share dividend
Lucky Cement Limited has declared a lower-than-expected net profit of Rs3.1 billion, down 31 per cent on yearly basis.
KARACHI:
Lucky Cement Limited declared a lower-than-expected net profit of Rs3.1 billion, down 31 per cent on yearly basis.
The profit has dropped solely because of lower prices of cement in both local and export markets during fiscal year 2010, said IGI Securities analyst Sana Abdullah.
The prices of cement in domestic market were under pressure during the year and declined 26.6 per cent despite an increase in cost of production, the company informed in a notice sent to the Karachi Stock Exchange on Tuesday.
The net profit fell short of the consensus estimates of two research firms by 13 per cent.
The company also announced Rs4 per share cash dividend along with the results.
It managed record total sales volume of 6.63 million tons, however, net sales of the company declined by 7 per cent to Rs24,509 million on lower cement prices. Local sales volume surged 26.3 per cent while exports showed a meagre growth of 2.2 per cent.
Earnings per share declined 32 per cent to Rs9.7 compared with last year’s Rs14.21.
Gross margins came down to 32.5 per cent in the period under review compared with 37 per cent in fiscal year 2009.
Saving costs
A waste heat recovery plant generating up to 15 megawatts is operational while a similar plant of 10MW is under process at Pezu. However, significant cost savings is not expected as the cost of goods sold only declined one per cent, said Abdullah.
Lucky Cement is expected to be the biggest beneficiary of the inland freight subsidy for cement exports through sea routes as the company is expected to book Rs126 million as subsidy.
Finance cost was down 54 per cent to Rs569 million compared with Rs1,237 million in fiscal year 2009 as the company repaid its long-term loans during fiscal year 2010.
However, distribution costs increased 41 per cent due to higher freight and transportation costs.
Dispatches are expected to remain slow on the back of the floods, heavy monsoon rains and slowdown in activity because of Ramazan.
Exports
The prices of cement in the international market will be competitive in the near future, the company said in the notice.
Ex-factory cement prices are expected to come down to Rs5,800 per ton due to lacklustre demand, predicted Abdullah. However, they will pick up in the second quarter as construction activity will increase, the analyst added.
Afghanistan has become a potential market for cement export and the local cement industry will reap the benefits because of close proximity.
The company’s plant at Pezu on the main Indus Highway, close to Afghanistan, will help capture a large export market share.
Published in The Express Tribune, August 11th, 2010.
Lucky Cement Limited declared a lower-than-expected net profit of Rs3.1 billion, down 31 per cent on yearly basis.
The profit has dropped solely because of lower prices of cement in both local and export markets during fiscal year 2010, said IGI Securities analyst Sana Abdullah.
The prices of cement in domestic market were under pressure during the year and declined 26.6 per cent despite an increase in cost of production, the company informed in a notice sent to the Karachi Stock Exchange on Tuesday.
The net profit fell short of the consensus estimates of two research firms by 13 per cent.
The company also announced Rs4 per share cash dividend along with the results.
It managed record total sales volume of 6.63 million tons, however, net sales of the company declined by 7 per cent to Rs24,509 million on lower cement prices. Local sales volume surged 26.3 per cent while exports showed a meagre growth of 2.2 per cent.
Earnings per share declined 32 per cent to Rs9.7 compared with last year’s Rs14.21.
Gross margins came down to 32.5 per cent in the period under review compared with 37 per cent in fiscal year 2009.
Saving costs
A waste heat recovery plant generating up to 15 megawatts is operational while a similar plant of 10MW is under process at Pezu. However, significant cost savings is not expected as the cost of goods sold only declined one per cent, said Abdullah.
Lucky Cement is expected to be the biggest beneficiary of the inland freight subsidy for cement exports through sea routes as the company is expected to book Rs126 million as subsidy.
Finance cost was down 54 per cent to Rs569 million compared with Rs1,237 million in fiscal year 2009 as the company repaid its long-term loans during fiscal year 2010.
However, distribution costs increased 41 per cent due to higher freight and transportation costs.
Dispatches are expected to remain slow on the back of the floods, heavy monsoon rains and slowdown in activity because of Ramazan.
Exports
The prices of cement in the international market will be competitive in the near future, the company said in the notice.
Ex-factory cement prices are expected to come down to Rs5,800 per ton due to lacklustre demand, predicted Abdullah. However, they will pick up in the second quarter as construction activity will increase, the analyst added.
Afghanistan has become a potential market for cement export and the local cement industry will reap the benefits because of close proximity.
The company’s plant at Pezu on the main Indus Highway, close to Afghanistan, will help capture a large export market share.
Published in The Express Tribune, August 11th, 2010.