Lucky Cement’s Profits Decrease by 65% During First Half Year

Lucky Cement Limited, the largest cement producer in the country, has announced its financial results for half year that ended on December 31st, 2019.

Standalone Basis

On a standalone basis, the company’s profits were stated at Rs. 1.93 billion, down by 65% during the half-year as compared to Rs. 5.5 billion recorded in the same period last year.

During the half-year, on a stand-alone basis, the company’s net sales declined by 15% to Rs. 21.21 billion as compared to Rs. 24.95 billion in the same period last year. Whereas the export sales of the company showed an increase of 19.1% to Rs. 6.43 billion as compared with Rs. 5.40 billion. However local sales of the company saw a decline of 16.3% to Rs. 24.67 billion against Rs. 24.50 billion.

The revenue was down due to lower sales volumes, cut-throat pricing due to lower demand and higher transportation costs.

The cost of sales was reported at Rs. 17.98 billion as compared with Rs. 17.53 billion. Gross profit went down by 56.6% to Rs. 3.24 billion as compared with Rs. 7.42 billion.

Per ton cost of sales during the half-year was increased by 12% which was due to an exceptional increase in gas prices and other fuel prices, higher fixed cost absorption and higher transportation cost. Distribution costs were stated at Rs. 1.89 billion, up by 38% as compared with Rs. 1.37 billion during the half-year. Other income increased to Rs. 1.70 billion from Rs. 1.60 billion.

Earnings per share of the company went down to Rs. 5.99 in comparison to Rs. 17.01 reported during the same period last year.

Consolidated Basis

The company has reported a consolidated net profit after tax of Rs. 3.92 billion during the half-year, which is 36.05% lower as compared to Rs. 6.13 billion for the same period last year.

On consolidated basis, the sales of the company was posted at Rs. 60.73 billion, which is 13.07% higher as compared to Rs. 53.71 billion posted in the same period last year.

At the time of filing this report, LUCKY’s shares at the bourse were trading at Rs. 482, up by Rs. 5.92 or 1.24% with a turnover of 532,800 shares on Thursday.

Outlook

The company has stated that despite the current economic challenges, there has been an overall growth in domestic and export off-takes. The outlook of the cement industry will continue to be challenging due to availability of excess capacity in the North Region, which will put adverse pressure on the pricing of the cement. Whereas the prices of exports from the South are also very competitive due to surplus supplies available. The input rise can increase in the future which will be due to higher electricity and gas tariffs.



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