Lucky Cement – the country’s largest cement maker with over 18% market share – has announced a net profit of Rs11.3 billion in year ending on June 30, up 16.4% compared to Rs9.7 billion in the previous fiscal year.
Earnings per share (EPS) of the company jumped to Rs35.08 during FY14 against an EPS of Rs30.04 in the previous fiscal year.
The earnings growth was primarily supported by higher cement offtake and retention during the period. On a quarterly basis, earnings grew 4% quarter-on-quarter to Rs3.15 billion or EPS of Rs9.78 during the fourth quarter of fiscal year 2014.
The company, along with the result, announced a final cash dividend of Rs9 per share. “The cash dividend was slightly lower than the target predicted and industry’s estimates,” Global Research reported on Tuesday.
The revenue of the company increased 14% year-on-year (YoY) to Rs43.08 billion during FY14 because of a 9% YoY increase in total offtake to 6.62 million ton and 14% YoY increase in local cement prices to Rs506 for a 50-kg bag.
On a quarterly basis, top-line grew 15% YoY (-2% quarter on quarter) to Rs11.63 billion during fourth quarter of FY14 because of a 9% YoY increase in cement dispatches to 1.78 million tons and a 14% YoY increase in cement prices to Rs523 for a 50-kg bag.
Despite a significant increase in cement retention, gross margins of the company declined by 1 percentage point (pps) YoY to 43% during FY14 because of a 17% YoY increase in gas tariff and Rs50 per mmbtu increase in Gas Infrastructure Development Surcharge (GIDC) from January 1, 2014.
Lucky Cement’s other income surged 294% YoY to Rs978 million during FY14 compared to Rs248 million during FY13 as a higher average cash balance likely increased the company’s treasury income during the period.
The company has various efficiency projects in its pipeline, including 5MW Waste Heat Recovery (WHR) plants at both its cement plants, a vertical grinding mill at its Karachi plant, and a Tyre Derived Fuel (TDF) facility at its Pezu plant.
It also plans to take advantage of the lucrative tariffs set by National Electric Power Regulatory Authority (Nepra) for coal power plants by installing a 660MW coal-based electricity generation facility.
Moreover, Lucky Cement’s joint venture grinding facility in Iraq started commercial operations on February 2014 and has sold 0.135 million tons as of June 2014. In addition, its joint venture plant in Congo is scheduled to begin commercial operations by June 2016.
Published in The Express Tribune, September 3rd, 2014.