Corporate results: Lucky Cement makes profit of Rs2.5b in 1st quarter

Better sales value, lower financial cost aid earnings.

KARACHI: Lucky Cement, the largest and one of the most efficient cement manufacturers with 18% market share, has announced a respectable profit growth of 26% in the first three months (July-September) of fiscal year 2013-14.

According to analysts, the earnings are good and quite close to market expectations, but not up to the status of a company that leads the market.

The company recorded after-tax profit of Rs2.54 billion or earnings per share of Rs7.87 compared to profit of Rs2.01 billion or EPS of Rs6.23 in the previous quarter.

“Lucky reported a handsome profit growth of 26% but its performance still remained low mainly because of weak seasonal sales in the July-September period. Data shows that cement sales remain subdued in the first quarter of every year,” Summit Capital analyst Sarfaraz Abbasi told The Express Tribune.

The growth in earnings was driven by better sales value, lower financial charges and higher other income.

Revenues rose 20% year-on-year to Rs10.6 billion in the first quarter of 2013-14 against sales of Rs8.85 billion in the same period last year.

Growth in sales was on account of higher average retention prices, which were up 5.4% year-on-year. Cost of sales grew 4% to Rs5.16 billion.

Gross profit of the company increased 8% to Rs4.46 billion against Rs3.87 billion last year. Gross margin went up one percentage point to 45% against 44% last year. Operating cost fell 22% to Rs975 million, which was mainly the result of lower distribution cost due to lower volumetric sales.

Other income rose a handsome 156% to Rs221 million on higher returns on deposits and return on short-term investments. Financial cost dropped 39% to Rs12 million, another factor that aided the earnings.

Published in The Express Tribune, October 30^th, 2013.

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