It is shocking to learn from the Annual Report of the Company about the sudden demise of the renowned industrialist and founder Chairman/of the company, Abdul Razzak Tabba on May 19, 2005.
During the year under review the performance of the company remained quite impressive as its sales and profitability were considerably on the higher side as compared to the preceding year's. However, the Board of Directors skipped dividend this year as cash outflow at this juncture is not appreciable because of funds needed to meet the financing of huge expansion project.
The company is installing two new lines at its Pezu, NWFP plant. Similarly, the company is building a Green Field Plant consisting of two lines which will be able to produce a total of 8,400 tonnes of cement of different types and grades per day. The company is also taking up new projects at Karachi of Cement plant (project cost Rs 5.50 billion) and Power Generation Plant (cost at Rs 1.20 million) and total cost of projects would be Rs 6.70 billion.
Lucky Cement Limited was incorporated in Pakistan on September 18, 1993 having its registered office located at Pezu, District Lakki Marwat in North West Frontier Province. Its head office and Share Department are situated at 6-A Muhammad Ali Housing Society Karachi.
The shares of the company are quoted on all three stock exchanges in Pakistan. The company is engaged in the manufacturing and marketing of cement. At present, the company is in the process of expanding its production capacity. This would increase the production capacity of Lucky Cement by 8,400 tons per day at each facility.
The company is one of the constituent members of a large conglomerate Yunus Brothers Group (YB Group) based in Karachi and has grown up remarkably over the last 50 years.
The YB Group is engaged in diversified manufacturing activities including textile, spinning, weaving, processing, finishing and stitching besides portland cement and power generation. The group comprises a number of industrial establishment including: Lucky Cement Ltd, Gadoon Textile Mills Ltd, Fazal Textile Mills Ltd, Yunus Textile Mills, Lucky Textile Mills, Lucky Energy (Private) Ltd and Security Electric Power Company Ltd.
Yunus Group has profound commitment to corporate social responsibilities as such it has established Aziz Tabba Foundation. The Foundation has sponsored Tabba Heart Institute, Aziz Tabba Dialysis Centre, Women & Children Hospital, Ghazni-Khel and Lucky Welfare Dispensary Pezu.
The company has obtained ISO 9001:2000 certification dated October 24, 2003 for manufacturing and sales of ordinary portland cement.
Lucky Cement's share carries very high market value at the stock exchange. During the last one year the market value of the share remained within a wide price band of Rs 32.15 and Rs 71.05 per share. On October 20, 2005, the closing quotation of its share was recorded at Rs 68.70 per share which is nearly seven times of the par value.
The operating of the company during the year under review (FY 2004-05) showed remarkable performance.
Sales in terms of value went up by 36.88% to Rs 3.980 billion as compared to Rs 2.908 billion in the preceding financial year. Gross profit at Rs 1,379.52 million (FY 2003-04: Rs 1,100.45 million) and operating profit at Rs 1,294.35 million (FY 1,034.11 million) registered increase by 25.36% and 25.16% respectively over the preceding year's.
Finance cost more than doubled while operating expenses were on the higher side by 28.4%. Gross margin eroded considerably by 3.2 percentage points.
Profit before taxation improved by 24.6% to Rs 1,209.95 million as compared to Rs 971.10 million posted in the previous year.
The company's provision for deferred taxation significantly increased. However profit after taxation (PAT) remained on the higher side as PAT at 826.59 million (FY 2003-04: 685.76 million) increased by 20.5% over the preceding year's.
In view of the on going huge expansion projects and the liquidity needed for it, cash outflow in the shape of dividend at this juncture was considered not desirable.
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Performance Statistics (Mln Rs)
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30th June 2005 2004
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Share Capital-Paid-up: 2,633.75 2,450.00
Reserves: 2,499.93 1,857.09
Shareholders Equity: 5,133.68 4,307.09
L.T. Debts: 6,530.16 1,150.00
Deferred Taxation: 858.52 497.61
Deferred Liabilities: 116.35 106.42
L.T. Deposits: 25.36 20.32
Current Liabilities: 2,142.77 930.88
Fixed Assets: 13,462.15 5,031.96
L.T. Deposits: 2.18 2.27
Current Assets: 1,342.51 1,978.09
Total Assets: 14,806.84 7,012.32
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Sales, Profit & Payout
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Turnover: 3,980.11 2,907.81
Gross Profit: 1,379.52 1,100.45
Operating Profit: 1,294.35 1,034.11
Other Operating Income: 1.14 1.54
Finance (Cost): (21.69) (10.84)
(Depreciation): (237.89) (215.30)
Profit Before Taxation: 1,209.92 971.10
Profit After Taxation: 826.59 685.76
Earnings Per Share (Rs): 3.14 2.60
Dividend Stock: - 184.00
Share Price (Rs) on 20-10-05: 68.70 -
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Financial Ratios:
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Price Earning Ratio: 21.88 -
Book Value Per Share: 19.49 17.58
Price/Book Value Ratio: 3.47 -
Debt/Equity Ratio: 56:44 21:79
Current Ratio: 0.63 2.12
Asset Turnover Ratio: 0.27 0.41
Days Receivables: 2 2
Days Inventory: 16 35
Gross Profit Margin (%): 34.66 37.84
Net Profit Margin (%): 20.76 23.58
R.O.A. (%): 5.58 9.78
R.O.C.E (%): 6.53 11.27
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Plant Capacity & Production (Clinker 000 Metric Tons)
Existing Line A & B
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Designed Capacity 4000tpd (300 Days): 1200 1200
Upgraded Capacity 4800tpd (300 Days): 1440 1440
Actual Production: 1295.65 1126.05
Capacity Utilisation (%): 89.98 78.20
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ii) Existing Line A & B
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Designed Capacity 4200tpd (300 Days): 1,260 -
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