Lucky Cement earns profit of Rs28.20 billion

KARACHI: Lucky Cement posted a profit-after-tax of Rs28.23 billion during the period ended June 30, 2021, a bourse filing said on Monday.

On a consolidated basis, the Lucky Cement’s profit of Rs28.23 billion included Rs5.37 billion of the non-controlling interest for the year ended June 30, 2021.

This translates into the earnings per share (EPS) of Rs70.69/share, compared with Rs18.96/share reported last year.

Further, on a consolidated basis, the company achieved gross turnover of Rs267.73 billion, which is 64 per cent higher, compared with the last year’s turnover of Rs162.87 billion.

During the period under review, the company’s consolidated net profit (attributable to owners of the holding company) increased 273 per cent, compared with the last year.

The increase in the net profit was attributable to an increase in the profitability of all the group companies. The profit-after-tax of the cement segment (holding company) grew 3.21 times during the year under review due to the improved margins and sales volumes.

The increase in the sales volumes was attributable to availability of the newly-commissioned increased capacity of Line 1 for the full-year versus the six months during the corresponding period and the growth of cement demand in the local market on the back of an increase in the construction activities.

The consolidated net profit also grew due to considerable increase in the profitability of cement operations of joint ventures outside Pakistan and the company’s other subsidiaries in Pakistan.

On a standalone basis, the company’s overall sales volumes posted a double-digit growth of 30.70 per cent to reach 9.96 million tonnes during FY 2020/21.

The local sales volumes grew 38.30 per cent to reach 7.56 million tonnes, compared with 5.46 million tonnes last year. Also, the Lucky Cement’s export sales volumes increased 11.30 per cent to 2.41 million tonnes, compared with 2.16 million tonnes last year.

Further, regarding the company’s standalone financial performance, the gross sales revenue increased 41.80 per cent to Rs88.36 billion, compared with Rs62.30 billion reported last year.

The per tonne cost of sales also decreased mainly due to better absorption of fixed cost as a result of an increase in the volumes and efficiencies achieved from the new production line in the North.

Lucky Cement recorded the net profit-after-tax of Rs14.07 billion. Similarly, the standalone EPS of the company is Rs43.51/share, compared with the last year’s EPS of Rs10.34/share.

Despite the negative impacts of the Covid-19 pandemic, the 1.2MTPA Greenfield cement production facility in Samawah, Iraq successfully completed its trial production on March 10, 2021.

The company also reported that its 1 X 660MW supercritical coal-based power project at Port Qasim has achieved completion status of approximately 98.7 per cent by June 30, 2021. Based on the current level of readiness by the National Transmission and Dispatch Company (NTDC) for providing interconnection facilities and the government’s support, the company is targeting to commence commercial operations by October 2021.

Lucky Cement remains committed towards making a real contribution to the society and the communities in which it operates.

It extended its merit-based support to deserving and less-privileged students across Pakistan. The company also continued to donate generously towards health-based initiatives by supporting various welfare organisations.

In support of the UN’s Sustainable Development Goals, Lucky Cement has initiated and promoted various sustainable projects to support the United Nations’ 2030 Agenda.

Regarding the outlook, the company has reported that while the Covid-19 cases in Pakistan subsided in the past, the fourth wave of the pandemic has started to pose new challenges. With the government’s focus on getting the majority population vaccinated and curtailing the spread of the virus through smart lockdowns, it is optimistically expected that the economy, in general, will continue the growth momentum, as seen in the current year.

A surge in the economic activity that triggered healthy demand for cement both in North and South regions during FY 2021 is expected to continue.

Several initiatives of the government, which included the construction package, focus on the low-cost housing schemes and reallocation of liquidity available with the local banks towards the construction and housing sector, construction of dams and water reservoirs and the China-Pakistan Economic Corridor (CPEC)-related activities are expected to continue strengthening the demand.

However, the intense hike in the global commodity prices, especially coal and furnace oil prices after ease in the Covid lockdowns internationally, is expected to put pressure on margins.

It further reported that the export sales are anticipated to remain stable; however, the prices will remain competitive due to surplus capacities available in the region.

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