AIRLINK 179.61 Decreased By ▼ -2.53 (-1.39%)
BOP 11.52 Decreased By ▼ -0.11 (-0.95%)
CNERGY 7.98 Decreased By ▼ -0.23 (-2.8%)
FCCL 46.62 Decreased By ▼ -0.55 (-1.17%)
FFL 16.61 Increased By ▲ 0.44 (2.72%)
FLYNG 28.58 Increased By ▲ 0.06 (0.21%)
HUBC 141.07 Decreased By ▼ -2.15 (-1.5%)
HUMNL 13.15 Decreased By ▼ -0.26 (-1.94%)
KEL 4.51 Decreased By ▼ -0.11 (-2.38%)
KOSM 6.25 Increased By ▲ 0.09 (1.46%)
MLCF 59.40 Increased By ▲ 0.15 (0.25%)
OGDC 227.35 Increased By ▲ 0.54 (0.24%)
PACE 5.96 Decreased By ▼ -0.09 (-1.49%)
PAEL 48.18 Decreased By ▼ -0.05 (-0.1%)
PIAHCLA 18.39 Decreased By ▼ -1.00 (-5.16%)
PIBTL 10.47 Decreased By ▼ -0.25 (-2.33%)
POWER 11.53 Decreased By ▼ -0.04 (-0.35%)
PPL 191.38 Decreased By ▼ -0.89 (-0.46%)
PRL 38.14 Decreased By ▼ -0.99 (-2.53%)
PTC 24.31 Increased By ▲ 0.06 (0.25%)
SEARL 99.96 Decreased By ▼ -2.00 (-1.96%)
SILK 1.15 No Change ▼ 0.00 (0%)
SSGC 38.02 Increased By ▲ 0.29 (0.77%)
SYM 15.44 Decreased By ▼ -0.19 (-1.22%)
TELE 8.01 Decreased By ▼ -0.09 (-1.11%)
TPLP 11.10 Increased By ▲ 0.14 (1.28%)
TRG 68.21 Decreased By ▼ -0.32 (-0.47%)
WAVESAPP 11.16 Increased By ▲ 0.15 (1.36%)
WTL 1.40 Decreased By ▼ -0.02 (-1.41%)
YOUW 3.93 Increased By ▲ 0.14 (3.69%)
AIRLINK 179.61 Decreased By ▼ -2.53 (-1.39%)
BOP 11.52 Decreased By ▼ -0.11 (-0.95%)
CNERGY 7.98 Decreased By ▼ -0.23 (-2.8%)
FCCL 46.62 Decreased By ▼ -0.55 (-1.17%)
FFL 16.61 Increased By ▲ 0.44 (2.72%)
FLYNG 28.58 Increased By ▲ 0.06 (0.21%)
HUBC 141.07 Decreased By ▼ -2.15 (-1.5%)
HUMNL 13.15 Decreased By ▼ -0.26 (-1.94%)
KEL 4.51 Decreased By ▼ -0.11 (-2.38%)
KOSM 6.25 Increased By ▲ 0.09 (1.46%)
MLCF 59.40 Increased By ▲ 0.15 (0.25%)
OGDC 227.35 Increased By ▲ 0.54 (0.24%)
PACE 5.96 Decreased By ▼ -0.09 (-1.49%)
PAEL 48.18 Decreased By ▼ -0.05 (-0.1%)
PIAHCLA 18.39 Decreased By ▼ -1.00 (-5.16%)
PIBTL 10.47 Decreased By ▼ -0.25 (-2.33%)
POWER 11.53 Decreased By ▼ -0.04 (-0.35%)
PPL 191.38 Decreased By ▼ -0.89 (-0.46%)
PRL 38.14 Decreased By ▼ -0.99 (-2.53%)
PTC 24.31 Increased By ▲ 0.06 (0.25%)
SEARL 99.96 Decreased By ▼ -2.00 (-1.96%)
SILK 1.15 No Change ▼ 0.00 (0%)
SSGC 38.02 Increased By ▲ 0.29 (0.77%)
SYM 15.44 Decreased By ▼ -0.19 (-1.22%)
TELE 8.01 Decreased By ▼ -0.09 (-1.11%)
TPLP 11.10 Increased By ▲ 0.14 (1.28%)
TRG 68.21 Decreased By ▼ -0.32 (-0.47%)
WAVESAPP 11.16 Increased By ▲ 0.15 (1.36%)
WTL 1.40 Decreased By ▼ -0.02 (-1.41%)
YOUW 3.93 Increased By ▲ 0.14 (3.69%)
BR100 12,596 Decreased By -35.4 (-0.28%)
BR30 39,133 Decreased By -311 (-0.79%)
KSE100 118,442 Decreased By -327.6 (-0.28%)
KSE30 36,376 Decreased By -156.5 (-0.43%)

Even though Lucky Cement’s results released yesterday showed impressive growth in net profits of about 49 percent, it was anticipations about the near future vis-à-vis transportation costs that kept the scrip’s prices from rising.
First, a narrative of 9MFY13 results: the company’s topline saw a 16 percent improvement, helped by increased volumes as well as improved retention prices of cement. Contrary to what has been the norm in local cement industry lately, Lucky posted a greater growth in export sales than in local sales – 30 percent year-on-year growth in export sales volume in 3QFY13.
Thanks to the use of alternate fuel as has been the general industry trend of late, as well as receding international prices of coal, the company saw its gross margins improving slightly, helping prop up the net margin as well.
However, industry sources have cited much apprehension about the recent increase in transportation costs due to hikes in charges of coal and raw material carriers. The additional charges are expected to come in effect from the coming month. And though cement prices will likely increase as a consequence; it will also marginally affect cement manufacturers’ margins in the coming quarter.
Despite that, Lucky continues to work towards improving its efficiency - for example, by replacing two cement grinding mills with European technology vertical mills to be able to tap into a wider export market. The firm is also installing and commissioning new packing plants.
Further, Lucky’s project proposal for setting up a cement manufacturing plant in DR Congo has been approved by the Economic Coordination Committee (ECC) and the cabinet, and financial negotiations for the project are currently under way. The company will also be investing in a cement grinding facility in Iraq.
Overall, demand for cement is expected to stay up for the coming few years in the country, while export demand, especially from Afghanistan and African markets, is also expected to stay healthy. Though the coming few months will be crucial in terms of the extent of increase in cement prices and the effect on cement manufacturers’ margins in the meanwhile, prospects appear great over a relatively longer term.


=================================================
LUCKY CEMENT
=================================================
RS(mn) chg 9MFY13 9MFY13
=================================================
Net Sales 16% 27,735 23,945
Cost of Sales 4% 15,487 14,883
Gross Profit 35% 12,218 9,062
Gross Margin 17% 44% 38%
Distribution Cost 21% 3,009 2,478
Administrative Exp 29% 469 364
Taxation 32% 1,248 948
PAT 49% 6,902 4,687
Net Margin 29% 25% 29%
EPS (Rs) 21.59 14.49
=================================================

Comments

Comments are closed.