FY-2020: Lucky Cement records consolidated earnings of Rs 7.32 billion

KARACHI: On a consolidated basis, Lucky Cement Limited reported net profit after tax of Rs 6.13 billion after taking out Rs 1.19 billion attributable to non-controlling interests for the fiscal year ended June 30, 2020. This translates into earnings per share (EPS) of Rs18.96 per share as compared to Rs35.03 per share reported during the last year.

Further, on a consolidated basis, the Company achieved gross turnover of Rs162.87 billion which is 19 percent higher as compared to last year's turnover of Rs 136.59 billion. During the fiscal year 2019-20 under review, the Company's overall Consolidated Net Profit decreased by 45.9 percent as compared to the same period last year.

The decrease in consolidated Net profit was mainly attributable to decrease in Net Profit of Cement segment (Holding Company) which decreased by 79.0 percent due to lower margins and higher input costs.

This decrease in Net Profit of holding company was partially offset by significant increase in Net Profit from foreign operations (LCL Investments Holdings Limited) as compared to last year.

Despite challenging market and economic dynamics, the increase in Net Profit is mainly attributable to growth in sales volume, increase in cement prices and decrease in input costs from both Congo & Iraq projects. While the profitability of ICI remained similar to last year, the increase in Automobile segment's profitability also contributed towards improving the consolidated net profit.

On a standalone basis Company's, overall sales volumes declined by 0.6 percent to reach 7.63 million tons during the current fiscal year. The local cement sales volume registered decline of 7.6 percent and were 5.41 million tons in comparison to 5.85 million tons last year, however, the export sales volumes of the Company improved by 18.8% to reach 2.16 million tons as compared to 1.82 million tons during the last year.

Anticipating challenges in domestic demand of cement the Company developed new sales markets for clinker exports. Resultantly, the Company's clinker exports increased by 32 percent as compared to previous year.

Further, with regards to Company's standalone financial performance, the gross sales revenue decreased by 7.8 percent to Rs62.30 billion compared to Rs67.55 billion reported during last year. This was mainly due to lower domestic selling prices during the year.

Moreover, the increase in input costs in addition to higher transportation costs and the impact of lockdowns due to COVID-19 also adversely impacted the Company's profitability. Despite these challenges, Lucky Cement recorded net profit after tax of Rs3.34 billion. Similarly, the standalone EPS of the Company is Rs10.34 / share as compared to last year's reported EPS of Rs32.44 / share.

The Company reported progress on the green field investment project for producing 1.2 million tons of clinker at Samawah, Iraq and 1 X 660 MW supercritical coal based power project at Port Qasim. 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.

The Company reported that although COVID-19 cases in Pakistan have receded significantly, it is yet to be seen by when it comes fully under control globally. With the current macro-economic situation, the Outlook of the Cement industry will continue to improve due to increase in demand in both domestic and international markets.

Based on the demand projections in the North, management expects that the prices in North will stabilize compared to the outgoing year. Export sales are anticipated to remain strong, however, prices will remain competitive due to surplus capacities available in the region.

Further, the Company expects the package announced for the construction industry by the Federal Government and their key initiatives will have a positive impact on the cement demand of the country.-PR

Copyright Business Recorder, 2020