Corporate results: Lucky Cement’s lucky streak continues

Posts record-high profits of Rs9.7b in fiscal 2013 owing to higher cement prices .

KARACHI:

Lucky Cement – the country’s largest cement manufacturer– recorded its highest-ever profit, by registering earnings of Rs9.714 billion for the fiscal year 2012-13. This entailed a jump of 43% compared to previous year’s profit of Rs6.782 billion.

According to a notice sent to the Karachi Stock Exchange, Lucky announced a cash dividend of Rs8 per share for the financial year as earnings per share soared to Rs30.04 versus Rs20.97 in fiscal 2012.



Despite volumetric variance of 1%, top-line of the company grew 13% to Rs37.8 billion against Rs33.3 billion in 2012 due to a sharp increase in cement prices.

The company successfully increased its export market share to 27.3% during the year compared to 26.3% in the previous year. On the local front, Lucky Cement’s market share fell half a
percentage point to 15%.

Sales volume in the local market registered a growth of 1.3%, rising to 3.77 million tons compared to 3.72 million tons last year. Exports also registered a growth of 1.7% from 2.25 million tons in 2012 to 2.29 million tons during the financial year ending June 30, 2013.

Lucky’s revenue per ton also rose 12% to Rs6,240 against Rs5,578 in the last fiscal year. The cost per bag, on the other hand, inched up 1%, Topline Securities reported on Tuesday.



Gross profit swelled 31.44% during the year to Rs16.721 billion as compared to Rs12.721 billion reported last year, reflecting a gross profit margin of 44% in the year, up by six percentage points.

Lucky Cement’s excellent performance was attributable to strong sales, driven by exorbitant cement prices and restricted cost of sales due to falling coal prices in the international market. While hefty contribution from the other income and lower financial charges due to lower interest rates throughout the year and repayment of loans also supported the earnings of the company, Summit Research commented on the company result.

Lucky Cement reported progress on its joint-venture investment in a cement plant in the Democratic Republic of the Congo, where financial closure is expected by December. The joint-venture project of a cement grinding facility in Iraq was also expected to be completed by the end of October.

The company managed to realise other income at Rs248 million during the current year against Rs5 million during the same period of the previous year.

Lucky Cement has placed orders for two vertical grinding mills to be installed at its Karachi plant. In addition to this, the company is planning to introduce tyre derived fuel (TDF) at the Pezu plant in Khyber-Pakhtunkhwa to replace coal. Furthermore, the company is in negotiations with Peshawar Electric Supply Company to supply surplus power to the company.

Published in The Express Tribune, September 18^th,  2013.

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