Lucky Cement reports consolidated earnings of Rs28.2bn for FY2021

KARACHI: On a consolidated basis, Lucky Cement Limited reported a profit after tax of Rs 28.23 billion of which Rs 5.37 billion is attributable to non-controlling interest for the year ended June 30, 2021. This translates into earnings per share (EPS) of Rs 70.69/ share as compared to Rs 18.96/ share reported last year.

Further, on a consolidated basis, the Company achieved gross turnover of Rs 267.73 billion which is 64 percent higher as compared to last year’s turnover of Rs 162.87 billion. During the year under review, the Company’s consolidated net profit (attributable to owners’ of the Holding Company) increased by 273 percent as compared to last year. The increase in Net Profit was attributable to increase in profitability of all the group companies.

The PAT of Cement segment (Holding Company) grew by 3.21 times during the year under review due to improved margins and sales volumes. The increase in sales volumes was attributable to availability of newly commissioned increased capacity of Line 1 for the full year versus six months during the corresponding period and the growth of cement demand in local market on the back of increase in construction activities.

The consolidated Net Profit also grew due to considerable increase in profitability of cement operations of Joint Ventures outside Pakistan and Company’s other subsidiaries in Pakistan.

On a standalone basis Company’s overall sales volumes posted a high double digit growth of 30.7 percent to reach 9.96 million tons during FY 2020-21. The local sales volumes grew by 38.3 percent to reach 7.56 million tons in comparison to 5.46 million tons during last year. The export sales volumes of the Company increased by 11.3% percent to 2.41 million tons, as compared to 2.16 million tons during last year.

Further, with regards to Company’s standalone financial performance, the gross sales revenue increased by 41.8 percent to Rs 88.36 billion compared to Rs 62.30 billion reported last year. The per ton cost of sales also decreased mainly due to better absorption of fixed cost as a result of increase in volumes and efficiencies achieved from new production line in the North.

Lucky Cement recorded net profit after tax of Rs 14.07 billion. Similarly, the standalone EPS of the Company is Rs 43.51 / share as compared to last year’s reported EPS of Rs 10.34 / share.

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

The Company also reported that its 1 X 660 MW supercritical coal based power project at Port Qasim has achieved completion status of approximately 98.7 percent by June 30, 2021. Based on the current level of readiness by NTDC for providing interconnection facility and the Government’s support, the Company is targeting is to commence Commercial Operation by October, 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 across Pakistan. 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.

Regarding the outlook, the Company has reported that while the Covid-19 cases in Pakistan subsided in the past, the forth 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. Increased surge in 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 include the construction package focus on low cost housing schemes and reallocation of liquidity available with local banks towards construction and housing sector, construction of dams and water reservoirs and CPEC related activities are expected to continue strengthening the demand. However, the intense hike in global commodity prices especially coal and furnace oil prices after ease of Covid lockdowns internationally, is expected to put pressure on margins. It further reported that export sales are anticipated to remain stable; however, prices will remain competitive due to surplus capacities available in the region.

Copyright Business Recorder, 2021