Karachi 28 2021: Lucky Cement Limited (LUCK) gains PKR 17 or 2.4 percent after announcement of strong corporate profitability growth.
LUCK adds 53.57 points to KSE-100 as the 100 index is up by 24 points to trade at 45,816.46 level.
On a consolidated basis, Lucky Cement achieved a gross turnover of PKR 69.27 billion which is 19.7% higher as compared to the same period last year’s turnover of PKR 57.85 billion.
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Moreover, the consolidated Net Profit of Lucky Cement was PKR 8.86 billion of which PKR 2.21 billion is attributable to non-controlling interests. The consolidated net profit attributable to owners of the Holding Company translates into an EPS of PKR 20.57 during the first quarter ended September 30, 2021 as compared to PKR 13.45 during the same period last year.
The increase in Net Profit was mainly attributable to increase in profitability at Lucky Cement Limited on the back of higher local sales during the quarter under review.
The increase in consolidated Net Profit was also supported by considerable increase in profitability of Chemicals business due to improved sales volumes of Polyester, Pharma and Animal Health business segments at ICI Pakistan Limited.
The net profit of Chemicals business also increased on account of a one-time unrealized accounting gain recognized on acquisition of controlling interest in NutriCo Pakistan (Pvt) Limited amounting to PKR 1.847 billion. Lucky Motor Corporation also posted growth in profitability mainly on account of growth in sales revenue; whereas, profitability of Company’s overseas operations increased mainly due to operations of Company’s Joint Venture Greenfield cement plant in Samawah, Iraq, which achieved its COD in March 2021.
Cement Industry and Company’s Performance — Unconsolidated
The industry-wide local sales volume registered a growth of 4.1% to reach 11.29 million tons during the first quarter under review versus 10.84 million tons during the same period last year. Export sales
volumes showed a large decline of 43.8% to reach 1.54 million tons during 1Q 2021-22 compared to 2.74 million tons during the same period last year. As a result the total cement sales of the industry declined by 5.6% to 12.83 million tons during the first quarter ended September 30, 2021 in comparison to 13.60 million tons during the same period last year.
The decline in overall dispatches is mainly attributed to decline in export volumes on the back of increasing coal prices and freight costs internationally, which have adversely impacted the viability of cement exports from Pakistan. Apart from this, some importing countries faced issues with their political and economical conditions, in addition to challenges already being faced due to Covid.
In line with the Cement Industry, Lucky Cement local sales volumes grew by 3.7% to reach 1.73 million tons in comparison to 1.66 million tons during the same period last year. Moreover, the export sales volumes of the Company decreased by 30.4% to 0.53 million tons as compared to 0.77 million tons during the same period last year, resulting in overall sales volumes declining by 7.0% to reach 2.26 million tons during 1Q 2021-22.
During the first quarter of 2021-22 under review, Lucky Cement overall gross sales revenue increased by 16.4% as compared to the same period last year. Where local sales revenue showed an increase of 30.2% (PKR 19.74 billion vs PKR 15.17 billion), the export sales revenue declined by 29.3% (PKR 3.23 billion vs PKR 4.57 billion) respectively.
The increase in Lucky Cement local sales volume during the period under review compared to same period last year is mainly due to sustained cement demand as a result of several initiatives taken by the Government to boost construction activities in the country.
During the first quarter of 2021-22 under review, per ton cost of sales of your Company increased by 27.8% as compared to the same period last year. This was mainly due to an increase in coal prices along with other input costs.
The Gross profit margins of the company for the first quarter under review were 27.3% as compared to 27.9% reported during the same period last year. This was due to increase in input costs which was partially offset by increase in prices.
During the first quarter of 2021-22 under review, the dividend income received by Lucky Cement from its subsidiary, ICI Pakistan was PKR 1.02 billion.
Lucky Cement achieved a profit before tax of PKR 4.30 billion during the first quarter under review as compared to PKR 2.69 billion reported during the same period last year. This was primarily on account of the increase in sales revenue and dividend income during the first quarter under review.
Accordingly, after-tax profit of PKR 3.28 billion was achieved during the first quarter under review as compared to PKR 2.23 billion reported during the same period last year.
