Lucky Cements results for the third quarter of this fiscal year were as good as promised. With a year-on-year top line growth of 29 percent in the Companys revenues during 9MFY12, the results were quite in line with analysts expectations. The growth seen in Lucky Cements revenues during 3QFY12 and 9MFY12, on a year-on-year basis, comes at the heels of better retention prices of cement in the country, which have gone up by over 25 percent during July-March FY12. While growth in volumes-7.5 percent in domestic sales-was also witnessed, the surge in the top line is attributable mainly to healthy domestic retention prices of cement. As for exports, while a slight improvement in export sales in terms of volumes was witnessed in the quarter under review on a year-on-year basis, export sales declined by about 5 percent during 9MFY12 relative to the same period of last year. The Companys cost of sales also depicted a year-on-year increase. However, the increase was masked by the improvement in turnover, leading to a gross margin growth of over 5 percentage points for the cumulative nine months of the year, relative to 9MFY11. Distribution costs as a percentage of sales decreased from 14 percent in 9MFY11 to 10 percent in 9MFY12, with the decrease in export sales volumes explaining the decline. Overall, operating margins for the company improved to 26 percent during July-March FY12, relative to the same period of last year, while net profit recorded a whopping surge of around 90 percent during the same period relative to the previous year. Its the expansion plans of Lucky Cement which are the Companys highlight, going forward. The due diligence for establishing the cement project at DR Congo is making encouraging headways, while Lucky has also decided to set up an 870,000 tons green field cement grinding plant in Iraq, estimated to cost $30 million. The project in Iraq is to be established as a joint venture with a local partner, and is meant to be equity-financed with equal contributions from both partners. Lucky will also be investing in its newly incorporated associated company by the name Yunus Energy Limited. The project, to be set up in Thatta will be 50MW wind electricity project costing $143 million, to be financed via debt and equity in a ratio of 20:80. Future prospects for Lucky appear bright, thanks to improving prices and volumes of domestic dispatches, while there are promises of improved export sales to Afghanistan and India in the current fiscal year as well.
========================================================= Lucky Cement P&L ========================================================= Rs in mn 3QFY12 Y/Y chg 9MFY12 Y/Y chg ========================================================= Net sales 8,572 32% 23,946 29% cost of sales 5,323 19.9% 14,883 19% gross profit 3,248 57% 9,063 50% Gross margin 37.9% 19% 37.8% 16% Distribution costs 735 5% 2,477 -1% Operating profit 2,390 82% 6,222 88% Operating margin 27.9% 38% 26.0% 46% profit after taxation 1,669 64% 4,687 89% Net margin 19.5% 25% 19.6% 47% EPS 5.16 14.49 =========================================================
Source: KSE notice PSMC: like hot cakes! Analysts expected Pakistan Suzuki Motor Company (PSMC) to post solid top line growth in its result, released on Thursday and the Company did not disappoint. In effect, PSMC is off to a speeding start this year and the expansion in its top line is enough to put FMCGs to shame. The Companys sales revenue shot up by a whopping 49 percent from Rs.12.57 billion during 1QCY11 to Rs.18.77 billion in 1QCY12. There are two reasons behind this stellar growth. First, car sales have jumped up to over 30,000 units; thanks largely to the Punjab governments taxi scheme. Company officials also point out that improving conditions in agriculture sector have also prompted sales of pickups. Secondly, car prices have also been notched up by an average of about 13 percent compared to the same period of last year. Growth in the cost of sales was tamed below the corresponding growth in sales, helping PSMC boost its gross margin to 5 percent in the outgoing quarter, compared to 3 percent in 1QCY11. A slight decline of 4 percent has been recorded in the Companys other operating income because slight reduction in the discount rate has led to lower rate of return on bank deposits. The easing of import restrictions for used cars had been viewed as a red flag for auto assemblers in the country. However, so far the financial performance of not just PSMC, but also its competitors belies that warning.
============================================ Pakistan Suzuki Motor Company ============================================ Rs(mn) 1QCY12 1QCY11 Chg ============================================ Revenue 18765 12570 49% Cost of sales 17786 12227 45% Gross profit 978 343 185% Gross margin 5% 3% N/A Administrative cost 193 162 19% Other operating income 127 132 -4% PAT 589 91 547% EPS(Rs) 7.15 1.11 544% ============================================
Source: Company announcement
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