Lucky cement (PSX: LUCK) released its year-end accounts with the PSX posting a top line of Rs45.2 billion, a growth of one percent (FY15: 4%) and earned after tax profits of Rs12.94mn in the outgoing year, a four percent growth (FY15: 10%). The company's total dispatches stood at 6.9 million tons against 6.79 million tons in FY15, a growth of 2.1 percent (FY15: 3%). The company also gave a cash dividend of Rs10 per share (100%).
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A big win this year is a 5 percent decline in cost of sales, that has also pushed margins up to 48 percent (FY15: 45%, FY14: 43%). Other income grew by 14 percent year-on-year, with a significant decline in distribution costs of 34 percent that have all contributed to a strong bottom line despite lukewarm growth in local dispatches and overall revenues with a 32 percent decline in exports.
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Lucky's current market share stands at 17.8 percent (FY15: 19.2%) whereas it captures 16 percent of the total cement production capacity. While market share has gone down primarily because of a decline in its export share, the company continues to be a market leader.
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The company is adding 3.55 million tons to its existing cement capacity of 7.38 million tons: A brownfield expansion of 1.25 million tons to its Karachi plant (3.6 million tons current) at a cost of $30 million; and the company is in the process of acquiring land for a 2.3 million-tons greenfield plant in Kalar Kahar located in Punjab at a cost of $200 million. Its second existing plant is located in Pezu, KPK with a capacity of 3.79 million tons.
Once these expansions come online-the Karachi plant is scheduled for end of 2017-Lucky will have about 11 million tons to its capacity, coming from three plants spread across the country, contributing to about 20 percent to industry production capacity given that other firms are also expanding. Its Congo plant will also be functional later this year.
On the energy front, the company has finally come to some sort of an understanding with the government on its 600MW of coal based power plant to explore both local and imported coal and the plant would need a redesign. The EPC is expected to wrap up in October 2016. Moreover, the WHR for 10MW at the Pezu plant will be running by December 2016.
The company also announced it would not be pursuing the supply of electricity to PESCO after NEPRA revised the tariff in July 2016.
With so much happening, one can only wish the company good luck but it seems like they have it in abundance already.
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