Tag: Lucky Cement Limited

KARACHI: Lucky Cement on Friday, August 06, 2022 posts record Rs36.42 billion annual profit after tax (PAT) for the year ended June 30, 2022, from which Rs6.93 billion is attributable for the non-controlling interest.

The earnings per share (EPS) are of Rs91.22 per share as compared to Rs70.69 per share reported last year.

The company achieved 60 per cent higher net turnover of Rs331.5 billion as compared to last year’s turnover of Rs207.2 billion.

The consolidated net profit of the company remained Rs36.4 billion out of which Rs29.5 billion was attributable to the owners of the holding company, compared to Rs28.2 billion and Rs22.9 billion, respectively for the prior year.

The EPS was of Rs91.22 during the fiscal year ended June 30, 2022 as compared to Rs70.69 during last year, representing a growth of 29 per cent.

READ MORE: Lucky Cement announces Rs26.53 billion 9M profit

The exceptional growth in revenue, despite economic challenges is owing to robust performance across all businesses of the group and is an affirmation of the successful execution of the Group’s diversification strategy.

On a standalone basis the Company’s overall sales volumes declined by 8.9 per cent to reach 9.1 million tons during the year ended June 30, 2022 in comparison to 10 million tons last year.

Local sales volume dropped by 3.6 per cent to reach 7.3 million tons in the current year compared to 7.6 million tons last year. While the export sales volume declined substantially by 25 per cent to 1.8 million tons during the year compared to 2.4 million tons during last year due to non-viability in terms of pricing on the back of persistent high coal prices in the international market coupled with increased shipping freights.

Despite the reduction in volumes in both domestic and export sales, the profitability of the local cement operations improved marginally because of enhanced operational efficiencies, including better management of sales and distribution costs, which decreased as a percentage of sales.

READ MORE: Lucky Cement installs 34MW solar power project

The company achieved a major milestone when its wholly owned subsidiary, Lucky Electric Power Company Limited (LEPCL), achieved the Commercial Operations Date (COD) on March 21, 2022 of the 660 MW coal-fired power plant set up at Port Bin Qasim, Karachi.

This milestone will play a key role in increasing the energy security and prosperity of Pakistan. It will also go on to reduce the cost of electricity and reliance on imported fuel in the long run after the completion of Phase III of SECMC in June 2023.

The power generated from the plant is being fed into the national grid in line with a power purchase agreement signed with the Government. In another major development, the company’s subsidiary, Lucky Motor Corporation started assembling Samsung mobile phones in Pakistan in December, 2021.

Lucky Cement remains committed towards making a real contribution to the society and the communities in which it operates. The company extended its merit-based support to deserving and less privileged students in Pakistan and abroad.

The company also continued to donate generously towards health-based initiatives by supporting various welfare organizations. In support of the UN Sustainability Development Goals, the company has initiated and promoted various sustainable projects to support the United Nations’ 2030 Agenda.

READ MORE: Lucky Cement wins corporate excellence award

Regarding the future outlook, the company has reported that it expects fiscal year 2023 to be challenging for Pakistan’s economy, especially due to high current account deficit, which stood at $17.4 billion for fiscal year 2022 versus $2.8 Billion for fiscal year 2021.

The ongoing political instability has deteriorated the economic position of the Country and resumption of foreign exchange inflows from the International Monetary Fund (IMF) program has faced serious delays.

The IMF staff level agreement has now been signed and as per Government statements majority of conditions have been met and it expects the program to resume post approval from the IMF Board towards end of August 2022.

The resumption of the IMF program will not only reduce uncertainty but also open avenues for borrowing from other sources, which could help stabilize the foreign reserves and the domestic economic situation. Apart from this, certainty in the political landscape of the Country is needed so that long term and sustainable measures are taken for enhancing the exports and ultimately reducing the current account deficit of Pakistan.

The commodity super cycle, which started last year post-pandemic, continues to persist. This has been further aggravated by the ongoing Russia-Ukraine conflict resulting in continuous volatility in commodity prices particularly coal, petroleum products and packaging material, which has significantly increased the cost of production for cement.

A similar trend has been witnessed in other construction materials as well, mainly steel which has resulted in a hike in overall construction costs. On the local front, rising interest rates coupled with higher inflation have severely affected the purchasing power which will impact the cement demand in the short term.

KARACHI: On a consolidated basis, Lucky Cement Limited reported the profit after tax to date of Rs 26.53 billion of which Rs 5.81 billion is attributable to non-controlling interests for the nine months (9M) ended March 31, 2022. This translates into earnings per share (EPS) of Rs 64.07 / share as compared to Rs 56.36 / share reported during the same period last year.

Further, on a consolidated basis, the Company achieved gross turnover of Rs 265.70 billion which is 31.2 per cent higher as compared to the same period last year’s turnover of Rs 202.46 billion.

During the 9M 2021-22 under review, the Company’s consolidated net profit (attributable to owners’ of the Holding Company) increased by 13.7 per cent as compared to the same period last year.

Despite the challenges due to increasing production costs across all segments, the Group has been able to secure double-digit growth in its profitability.

The increase in Net Profit was mainly attributable to impressive performance of the Group’s chemicals business and overseas cement segment.

The Group’s Polyester, Pharmaceutical and Animal Health segments were able to secure growths of 30.4 per cent, 56.7 per cent and 95.9 per cent respectively in operating results, versus same period last year, on the back of enhanced volumes, better sales mix and new product launches in the pharmaceutical segment.

This increase is in addition to the one-off unrealized gain on acquisition of controlling shares in NutriCo Pakistan amounting to Rs 1.85 billion. On the other hand, the Group’s joint venture cement production facility in Samawah, Iraq, which started its commercial production in March 2021, has also added healthy profits to the Group’s profitability.

During the outgoing quarter, a major milestone was achieved when Lucky Electric Power Company Limited – a wholly owned subsidiary of Lucky Cement, achieved the Commercial Operations Date (COD) of its 660 MW coal-fired power project on March 21, 2022. The addition of 660 MW to the national grid will not only play a key role in increasing the energy security and prosperity of Pakistan but will also go on to reduce the cost of electricity and reliance on imported fuel in the long run after the completion of Phase III of SECMC in June 2023.

On unconsolidated basis Company’s local sales volumes posted a decline of 3.4 per cent to reach 5.51 million tons during 9M 2021-22. The marginal decline for the Company versus negligible change in the industry numbers was mainly due to other cement plants becoming operational in the current period. Moreover, the export sales volumes of the Company decreased by 18.0 per cent to 1.56 million tons compared to 1.90 million tons during the same period last year, on the back of continuous volatility in international coal prices and exorbitantly high freight costs globally. Hence, overall sales volumes of the Company declined by 7.1 per cent to reach 7.07 million tons during 9M 2021-22.

Further, with regards to Company’s unconsolidated financial performance, the gross sales revenue increased by 19.6 per cent as compared to the same period last year.  Per ton cost of sales of the Company increased by 49.1 per cent as compared to the same period last year. This was mainly due to substantial increase in coal prices along with other input costs, which was a direct result of international commodity super cycle followed by the continuing conflict between Russia and Ukraine. Lucky Cement recorded net profit after tax of Rs 11.31 billion. It includes amount of Rs 1.48 billion as fee for provision of technical services to Nyumba Ya Akiba, Company’s joint venture in Democratic Republic of Congo during the current financial year.  The standalone EPS of the Company is Rs 34.97 / share as compared to the same period last year’s reported EPS of Rs 36.14/ share.

The Company reported progress on its brownfield plant expansion activities in KPK with project completion targeted for December 2022.

Lucky Cement continued its patronage on Education & Scholarship, Women Empowerment, Health, Environment Conservation and reassured its commitment for the development of society and the communities in which it operates. A recent testament of its commitment for energy conservation and promotion of green energy resources was the launch of a 34 MW captive solar power project with a 5.589 MWh Reflex energy storage to be installed at Pezu plant in Khyber Pakhtunkhwa. While the Company has faced non-availability of both Gas and Furnace Oil in the past, with the launch of this project it will not only attempt to overcome the impact of looming energy crisis in the country but will also make its operations sustainable.

As Pakistan once again witnesses significant drop in Covid-19 infections, the challenges posed by the pandemic have reduced significantly. However, the political uncertainty in the country as well Russia-Ukraine tension over-shadowed the recovery from the pandemic. Domestically, the challenges posed by looming energy crisis, circular debt, increased inflation, pressure on balance of payments, reduced foreign exchange reserves, exchange rate parity and fiscal deficit will continue to test the competitiveness of all businesses in the short to medium term. We expect that the performance of the economy will mirror the new Government’s strategy to negotiate and resume IMF program and to improve various economic indicators through sustained and effective policy measures.

The volatility in commodity prices internationally mainly due to Russia-Ukraine conflict, particularly coal and crude oil along with higher freight charges, is constantly impacting input costs of cement. Similar factors have also increased the cost of other construction materials particularly steel, due to which overall construction cost has gone up. On the other hand, due to recent hike in interest rate coupled with double-digit inflation and increasing cost of construction, cement demand is expected to remain under pressure in near future. Albeit in medium to long term, we expect strong demand to come from construction of dams, hydropower projects and other real estate development projects.

KARACHI: Lucky Cement Limited on Friday announced consolidated earnings of Rs17.15 billion for the first half ended December 31, 2021.

Out of which Rs4.01 billion is attributable to non-controlling interests for the first half ended December 31, 2021.

This translates into earnings per share (EPS) of PKR 40.66 / share as compared to PKR 32.05 / share reported during the same period last year.

READ MORE: Lucky Cement wins corporate excellence award

Further, on a consolidated basis, the Company achieved gross turnover of Rs154.50 billion which is 24.9 per cent higher as compared to the same period last year’s turnover of Rs123.72 billion.

During the HY 2021-22 under review, the company’s consolidated net profit (attributable to owners’ of the Holding Company) increased by 26.8 per cent as compared to the same period last year.

The increase in net profit was mainly attributable to the stellar performance of Company’s Chemicals business.

Apart from the one-off unrealized accounting gain recognized on acquisition of controlling shares in NutriCo Pakistan amounting to Rs1.847 billion, the Chemical business achieved considerable improvement in net profitability on account of impressive growth in its Polyester, Pharma and Animal Health business segments.

In the automobile business, Lucky Motor Corporation introduced Kia Stonic in its line up as well as started commercial production of Samsung branded mobile phones during the half year under review.

Whereas, profitability of Company’s overseas operations increased mainly due to improvement in sales volume and operations of Company’s Joint Venture Greenfield cement plant in Samawah, Iraq, which achieved its COD in March 2021.

On unconsolidated basis Company’s overall sales volumes posted a decline of 5.9 per cent to reach 4.70 million tons during HY 2021-22. Company’s local sales volumes remained almost in line with the corresponding period last year i.e. 3.63 million tons in 1HY 2021-22 versus 3.66 million tons during the same period last year. The export sales volumes of the Company declined by 19.7 per cent to 1.07 million tons as compared to 1.34 million tons during the same period last year.

The decline in overall dispatches is mainly attributed to decline in export volumes on the back of volatily in coal prices and freight costs internationally, which have adversely impacted the viability of cement exports from Pakistan.

Further, with regards to Company’s unconsolidated financial performance, the gross sales revenue increased by 20.2 per cent to PKR 50.61 billion compared to PKR 42.11 billion reported during the same period last year. The per ton cost of sales also increased mainly due to increase in coal prices along with other input costs. Lucky Cement recorded net profit after tax of PKR 5.77 billion showing growth of 27.2 per cent. Similarly, the standalone EPS of the Company is PKR 17.86 / share as compared to the same period last year’s reported EPS of PKR 14.04 / share.

The Company reported progress on its brownfield plant expansion activities in KPK with project completion targeted for December 2022.

The construction activity for setting up a 660 MW super critical, lignite coal-based power plant is near to completion and it has been synchronized with the national grid in November 2021. The Project is currently under testing phase and it is targeted to achieve COD in February 2022.

Lucky Cement continued its patronage on Education & Scholarship, Women Empowerment, Health, Environment Conservation and reassured its commitment for the development of society and the communities in which it operates.

While the previous waves of Covid-19 receded in the past, the pandemic continues to resurge with different variants of the virus. Even with the persistent drive of the Government on compliance of SOPs and getting the masses vaccinated, prudent expectation is that volatile infection rates will continue for the time being. We, however expect that the economy will continue to show resilience against the adverse impacts of such pandemic.

On the other hand, the ongoing inflationary trend in commodities globally has resulted in an increase in cost of inputs, such as coal, diesel, furnace oil and freight charges, which are a major cost component of cement. Currency devaluation has further impacted and increased these costs.  Due to increase in costs of other construction materials, the local demand will remain flat. At the same time, cement prices have only partially offset the increase in input costs faced by the manufacturers.

Construction of dams, hydropower projects, real estate development and low cost housing schemes will help to maintain the demand of cement in the medium to long term.