Lucky Cement announces capacity expansion of 3.15 MT and records consolidated earnings of PKR 12.44 billion for the half year ended December 31, 2020
Lahore (Muhammad Yasir) Lucky Cement announced to enhance its cement production capacity at its Pezu Plant by 3.15 million tons per annum, to keep pace with the increasing demand in the domestic cement industry. The construction work on the project is expected to commence within current financial year and is expected to be completed in 1.5 to 2 years. This expansion will result in a total capacity of 15.3 MT of cement per annum.
On a consolidated basis, Lucky Cement Limited reported net profit after tax of PKR 12.44 billion of which PKR 2.08 billion is attributable to non-controlling interests for the half year ended December 31, 2020. This translates into earnings per share (EPS) of PKR 32.05 / share as compared to PKR 9.93 / share reported during the same period last year.
Further, on a consolidated basis, the Company achieved gross turnover of PKR 123.72 billion which is 56% higher as compared to the same period last year’s turnover of PKR 79.56 billion. During the 1HY 2020-21 under review, the Company’s consolidated net profit (attributable to owners’ of the Holding Company) increased by 223% as compared to the same period last year. The increase in net profit was mainly attributable to increase in net profitability of Cement segment (Holding Company) which grew by 134% due to higher turnover supported by absorption of fixed costs and efficiencies achieved from new production line in the North. The increase in net profit of Holding Company was also supported by considerable increase in net profits of Lucky Motor Corporation because of strong growth in automobile sales. In addition, LCL Investment Holdings Limited delivered a healthy performance as compared to same period last year owed to growth in sales volume, coupled with improved retention price and decrease in input costs from both Congo & Iraq projects.
On a standalone basis Company’s overall sales volumes posted a high double digit growth of 35.9% to reach 4.99 million tons during 1HY 2020-21. The local sales volumes grew by 41.2% to reach 3.66 million tons in comparison to 2.59 million tons during the same period last year. Also, the export sales volumes of the Company increased by 23.3% to 1.34 million tons as compared to 1.08 million tons during the same period last year.
The increase in Company’s local sales volume during the period under review is mainly due to enhancement of operational capacity at Pezu Plant coupled with higher demand due to upsurge in economic activities. Moreover, growth in export sales volume is mainly due to higher exports of loose cement owed to improved demand.
Further, with regards to Company’s standalone financial performance, the gross sales revenue increased by 35.4% to PKR 42.11 billion compared to PKR 31.10 billion reported during the same period 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 PKR 4.54 billion. Similarly, the standalone EPS of the Company is PKR 14.04 / share as compared to the same period last year’s reported EPS of PKR 5.99 / share.
The Company reported that trial production at its Greenfield project for producing 1.2 million tons of cement at Samawah, Iraq has commenced during 3rd week of January 2021 and the project is expected to start commercial production in February 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 95% by end of this quarter. It was also reported that at present, the Company is following up with CPPA, NTDC and PPIB for the earliest availability of an interconnection facility which is essential for achieving the COD. Based on the current level of readiness by NTDC for providing interconnection facility and the Government eagerness to extend necessary support to power purchaser in this respect, it appears that project may achieve its Commercial Operation by mid of first quarter FY 2022.
Lucky Cement continued its patronage on Education, Women empowerment, Health and reassured its commitment for the development of society and the communities in which it operates.
Lucky Cement also provided update on future outlook that due to increase in economic activity, the local demand has shown healthy growth both in the North and South regions compared to same period last year. As a result, price improvement can be seen mainly in the North region. Further, the Company expects the package announced for the construction industry by the Federal Government and their key initiatives will continue to have a positive impact on the cement demand of the country.
