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Lucky Cement Limited Interim / Quarterly Report 2024
72198_rns_2024-01-26_8630b711-bc94-47fb-ba9d-9b8d493255cf.pdf
Interim / Quarterly Report
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Page 1 of 17
LUCKY CEMENT
LCK/CS/2023-24/
January 26, 2024
The General Manager
Pakistan Stock Exchange Limited
Stock Exchange Road
Off: I.I. Chundrigar Road
Karachi
The Director / HOD
Surveillance Supervision and Endorsement Dept
Securities & Exchange Commission of Pakistan
Islamabad
Dear Sir(s)
FINANCIAL RESULTS FOR THE HALF YEAR ENDED DECEMBER 31, 2023
This is to inform you that the Board of Directors of our Company in their meeting held on Thursday, January 25, 2024 at 4:30 p.m., at 6-A, Muhammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350 recommended the following:
| (I) Cash Dividend | Nil |
|---|---|
| (ii) Bonus Issue | Nil |
| (iii) Right Issue | Nil |
| (iv) Interim Dividend | Nil |
The financial results of the Company consisting of consolidated and unconsolidated condensed interim Statements of Financial Position, Profit or Loss and Other Comprehensive Income and Directors’ Report are annexed.
We will be transmitting the half yearly report of the Company for the period ended December 31, 2023 in electronic form through PUCARS within the specified time.
Yours truly,
for: LUCKY CEMENT LIMITED
ALI SHAHAB
GM Legal & Company Secretary
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 2 of 17
LUCKY CEMENT LIMITED
Consolidated Condensed Interim Statement of Financial Position
As at December 31, 2023
| Note | (Un-audited) | (Audited) | |
|---|---|---|---|
| December 31, | June 30, | ||
| 2023 | 2023 | ||
| (PKR in '000') | |||
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 5 | 293,566,188 | 294,838,879 |
| Intangible assets | 6,642,549 | 6,682,998 | |
| Right-of-use assets | 76,998 | 116,707 | |
| 300,285,735 | 301,638,584 | ||
| Long-term investments | 6 | 72,035,026 | 67,118,403 |
| Long-term loans and advances | 815,433 | 731,165 | |
| Long-term deposits and prepayments | 159,630 | 94,898 | |
| 373,295,824 | 369,583,050 | ||
| CURRENT ASSETS | |||
| Stores, spares and consumables | 20,266,696 | 22,608,453 | |
| Stock-in-trade | 7 | 71,269,217 | 48,660,510 |
| Trade debts | 65,170,839 | 59,903,590 | |
| Loans and advances | 7,488,587 | 3,220,177 | |
| Trade deposits and short-term prepayments | 4,795,886 | 6,270,645 | |
| Other receivables | 14,570,699 | 14,141,981 | |
| Tax refunds due from the Government | 654,413 | 538,812 | |
| Taxation receivable | 78,536 | 193,198 | |
| Accrued return | 250,118 | 100,097 | |
| Short-term investments | 33,398,237 | 44,199,457 | |
| Cash and bank balances | 42,475,179 | 38,939,424 | |
| 260,418,407 | 238,776,344 | ||
| TOTAL ASSETS | 633,714,231 | 608,359,394 | |
| EQUITY AND LIABILITIES | |||
| SHARE CAPITAL AND RESERVES | |||
| Issued, subscribed and paid-up capital | 8 | 2,930,000 | 3,118,386 |
| Reserves | 241,351,976 | 224,365,635 | |
| Attributable to the owners of the Holding Company | 244,281,976 | 227,484,021 | |
| Non-controlling interest | 34,550,970 | 33,515,038 | |
| Total equity | 278,832,946 | 260,999,059 | |
| NON-CURRENT LIABILITIES | |||
| Long-term loans | 129,088,713 | 135,857,715 | |
| Long-term deposits and other liabilities | 9,407,212 | 9,532,879 | |
| Lease liabilities | 36,623 | 29,064 | |
| Deferred income - Government grant | 3,728,999 | 4,305,281 | |
| Deferred liabilities | |||
| - Staff Gratuity | 3,198,821 | 2,696,191 | |
| - Deferred tax liability | 20,790,249 | 19,225,117 | |
| 23,989,070 | 21,921,308 | ||
| 166,250,617 | 171,646,247 | ||
| CURRENT LIABILITIES | |||
| Current portion of long-term loans | 10,906,164 | 9,009,157 | |
| Trade and other payables | 85,268,821 | 80,574,343 | |
| Provision for taxation | 19,523,283 | 13,910,125 | |
| Accrued markup | 5,070,676 | 5,046,314 | |
| Short-term borrowings and running finance | 66,933,093 | 67,043,227 | |
| Current portion of lease liabilities | 46,105 | 80,807 | |
| Unclaimed dividend | 61,617 | 50,115 | |
| Unpaid dividend | 820,909 | - | |
| 188,630,668 | 175,714,088 | ||
| 354,881,285 | 347,360,335 | ||
| TOTAL EQUITY AND LIABILITIES | - | - | |
| CONTINGENCIES AND COMMITMENTS | 9 | 633,714,231 | 608,359,394 |
The attached notes from 1 to 16 form an integral part of these consolidated condensed interim financial statements.
Chairman / Director
Chief Executive
Chief Executive Officer
Page 3 of 17
LUCKY CEMENT LIMITED
Consolidated Condensed Interim Statement of Profit or Loss
For the half year ended December 31, 2023 (Un-audited)
| Note | Half Year Ended | Quarter Ended | |||
|---|---|---|---|---|---|
| December 31, | December 31, | December 31, | December 31, | ||
| 2023 | 2022 | 2023 | 2022 | ||
| (PKR in '000') | (PKR in '000') | ||||
| Revenue | 10 | 247,475,040 | 219,147,990 | 122,542,655 | 112,310,098 |
| Less: Sales tax and excise duty | 34,057,599 | 29,090,478 | 16,316,771 | 14,808,685 | |
| Rebates, incentives and commission | 6,894,749 | 4,851,648 | 3,778,236 | 2,544,481 | |
| 40,952,348 | 33,942,126 | 20,095,007 | 17,353,166 | ||
| Net Revenue | 206,522,692 | 185,205,864 | 102,447,648 | 94,956,932 | |
| Cost of sales | (143,460,968) | (146,142,331) | (70,842,723) | (74,024,739) | |
| Gross Profit | 63,061,724 | 39,063,533 | 31,604,925 | 20,932,193 | |
| Distribution cost | (7,399,233) | (5,262,641) | (3,956,920) | (2,539,135) | |
| Administrative expenses | (4,287,910) | (2,863,401) | (2,055,982) | (1,396,690) | |
| Finance cost | (19,221,514) | (13,715,554) | (9,513,597) | (7,230,811) | |
| Other expenses | (2,326,648) | (1,861,529) | (1,192,751) | (688,100) | |
| Other income | 11 | 10,084,108 | 3,083,746 | 4,827,406 | 1,630,251 |
| Share of profit - joint ventures and associate | 8,452,681 | 3,650,206 | 4,250,572 | 2,469,529 | |
| Profit before taxation | 48,363,208 | 22,094,360 | 23,963,653 | 13,177,237 | |
| Taxation | (10,039,377) | (4,278,282) | (4,997,121) | (2,008,122) | |
| Profit after taxation from continuing operations | 38,323,831 | 17,816,078 | 18,966,532 | 11,169,115 | |
| Profit after taxation from discontinued operations | - | 507,507 | - | 221,945 | |
| Profit after taxation | 38,323,831 | 18,323,585 | 18,966,532 | 11,391,060 | |
| Attributable to: | |||||
| Owners of the Holding Company | 35,339,163 | 15,913,378 | 17,633,163 | 10,464,026 | |
| Non-controlling interest | 2,984,668 | 2,410,207 | 1,333,369 | 927,034 | |
| 38,323,831 | 18,323,585 | 18,966,532 | 11,391,060 | ||
| Earnings per share - basic and diluted | (PKR) | (PKR) | |||
| - continuing operations | 117.19 | 48.88 | 59.41 | 32.31 | |
| - discontinued operations | - | 0.44 | - | 0.19 | |
| 117.19 | 49.32 | 59.41 | 32.51 |
The annexed notes from 1 to 16 form an integral part of these consolidated condensed interim financial statements.
Page 4 of 17
LUCKY CEMENT LIMITED
Unconsolidated Condensed Interim Statement of Financial Position
As at December 31, 2023
| (Un-audited) | (Audited) | ||
|---|---|---|---|
| December 31, | June 30, | ||
| 2023 | 2023 | ||
| Note | (PKR in '000') | ||
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 5 | 99,361,900 | 95,620,306 |
| Intangible assets | 70,375 | 85,588 | |
| 99,432,275 | 95,705,894 | ||
| Long-term investments | 57,594,485 | 57,594,485 | |
| Long-term loans and advances | 184,189 | 194,204 | |
| Long-term deposits | 7,842 | 7,842 | |
| 157,218,791 | 153,502,425 | ||
| CURRENT ASSETS | |||
| Stores and spares | 12,342,207 | 14,084,018 | |
| Stock-in-trade | 6 | 10,315,535 | 6,048,507 |
| Trade debts | 5,817,960 | 5,089,667 | |
| Loans and advances | 905,163 | 749,292 | |
| Trade deposits and short-term prepayments | 65,560 | 2,153,705 | |
| Accrued return | 250,118 | 100,079 | |
| Other receivables | 4,541,327 | 4,797,885 | |
| Tax refunds due from the Government | 538,812 | 538,812 | |
| Short-term investments | 15.2 | 19,002,619 | 21,898,496 |
| Cash and bank balances | 5,241,297 | 4,116,181 | |
| 59,020,598 | 59,576,642 | ||
| TOTAL ASSETS | 216,239,389 | 213,079,067 | |
| EQUITY AND LIABILITIES | |||
| SHARE CAPITAL AND RESERVES | |||
| Issued, subscribed and paid-up share capital | 7 | 2,930,000 | 3,118,386 |
| Reserves | 130,575,612 | 134,247,940 | |
| 133,505,612 | 137,366,326 | ||
| NON-CURRENT LIABILITIES | |||
| Long-term deposits | 254,562 | 252,837 | |
| Long-term loans | 8 | 13,666,923 | 14,557,294 |
| Deferred Government grant | 1,949,581 | 2,121,307 | |
| Deferred liabilities | |||
| - Staff gratuity | 2,795,303 | 2,574,925 | |
| - Deferred tax liability | 11,299,116 | 10,025,499 | |
| 14,094,419 | 12,600,424 | ||
| 29,965,485 | 29,531,862 | ||
| CURRENT LIABILITIES | |||
| Trade and other payables | 30,289,154 | 29,918,702 | |
| Current maturity of long-term loans | 1,432,887 | 599,653 | |
| Short-term borrowings | 9 | 5,485,000 | 5,885,000 |
| Unclaimed dividend | 61,617 | 50,115 | |
| Unpaid dividend | 820,909 | - | |
| Accrued markup | 514,704 | 497,745 | |
| Taxation - net | 14,164,021 | 9,229,664 | |
| 52,768,292 | 46,180,879 | ||
| 82,733,777 | 75,712,741 | ||
| TOTAL EQUITY AND LIABILITIES | 216,239,389 | 213,079,067 | |
| CONTINGENCIES AND COMMITMENTS | 10 |
The annexed notes from 1 to 17 form an integral part of these unconsolidated condensed interim financial statements.
Chairman / Director
Chief Executive
Chief Financial Officer
Page 5 of 17
LUCKY CEMENT LIMITED
Unconsolidated Condensed Interim Statement of Profit or Loss
For the half year ended December 31, 2023 (Un-audited)
| Note | Half year ended December 31, 2023 (PKR in '000') | Quarter Ended December 31, 2023 (PKR in '000') | |||
|---|---|---|---|---|---|
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||
| Gross sales | 11 | 79,263,577 | 58,705,987 | 39,974,659 | 33,270,352 |
| Less: Sales tax and federal excise duty | |||||
| Rebates, incentives and commission | 18,328,834 | ||||
| 1,054,275 | 12,664,862 | ||||
| 708,044 | 8,950,830 | ||||
| 525,168 | 7,284,100 | ||||
| 396,505 | |||||
| 19,383,109 | 13,372,906 | 9,475,998 | 7,680,605 | ||
| Net sales | 59,880,468 | 45,333,081 | 30,498,661 | 25,589,747 | |
| Cost of sales | (38,060,121) | (32,810,247) | (19,508,653) | (19,098,668) | |
| Gross profit | 21,820,347 | 12,522,834 | 10,990,008 | 6,491,079 | |
| Distribution cost | (3,746,393) | (2,656,702) | (2,011,524) | (1,294,494) | |
| Administrative expenses | (1,019,828) | (916,500) | (531,266) | (470,669) | |
| Finance costs | (805,573) | (613,210) | (423,702) | (360,488) | |
| Other expenses | (1,856,330) | (1,107,765) | (941,081) | (491,259) | |
| Other income | 6,195,563 | 2,847,483 | 3,044,516 | 837,666 | |
| Profit before taxation | 20,587,786 | 10,076,140 | 10,126,951 | 4,711,835 | |
| Taxation | (6,877,670) | (2,947,521) | (3,346,168) | (1,435,629) | |
| Profit after taxation | 13,710,116 | 7,128,619 | 6,780,783 | 3,276,206 | |
| (PKR) | (PKR) | ||||
| Earnings per share - basic and diluted | 12 | 45.47 | 22.09 | 22.85 | 10.18 |
The annexed notes from 1 to 17 form an integral part of these unconsolidated condensed interim financial statements.
Page 6 of 17
LUCKY CEMENT
Directors' Report
The Directors are pleased to present to you the financial results of your Company which include both, unaudited consolidated and unconsolidated financial statements for the half year ended December 31, 2023.
Overview of Economy & Consolidated Financial Performance
During 1H FY24, navigating through economic volatility posed significant challenges for the country. The prevailing high interest rates, fueled by persistent inflation peaking at 29%, alongside imminent adjustments in power and gas tariffs aligned with the ongoing IMF program, have considerably affected businesses in Pakistan. The State Bank of Pakistan (SBP) has maintained a policy rate of 22%, suggesting a potential peak in interest rates. Future reductions are contingent on a decline in inflation. Furthermore, the government's stringent actions against smuggling and illegal currency outflows have yielded positive outcomes, stabilizing the exchange rate.
The management of your Company remains vigilant and is closely monitoring these developments. We continue to effectively apply strategies and resources to mitigate any impacts on the operations and financial performance of the Company.
On a consolidated basis, your Company achieved gross revenue of PKR 247.5 billion which is 12.7% higher as compared to the same period last year (SPLY) revenue of PKR 219.5 billion. This increase in gross revenue is primarily attributable to increased domestic sales and higher revenue from subsidiaries of your Company, namely Lucky Electric Power Company Limited and Lucky Core Industries Limited.
Resultantly your Company's consolidated net profit stands at PKR 38.3 billion compared to PKR 18.3 billion during the SPLY. The consolidated net profit translates into an EPS of PKR 117.19 during the half year ended December 31, 2023, as compared to PKR 49.32 during the SPLY.
The consolidated financial performance of your Company for the half year ended December 31, 2023, as compared to SPLY is presented below:
| PKR million except EPS | 1H FY24 | 1H FY23 | Change (%) |
|---|---|---|---|
| Gross Revenue | 247,475 | 219,532 | 12.7% |
| Net Revenue | 206,523 | 185,590 | 11.3% |
| Gross Profit | 63,062 | 39,064 | 61.4% |
| GP as % of Net Revenue | 30.5% | 21.0% | 44.9% |
| Operating Profit | 51,375 | 30,937 | 66.1% |
| EBITDA | 60,328 | 38,771 | 55.6% |
| Net Profit* | 38,324 | 18,324 | 109.2% |
| NP (Attributable to Owners of the holding company) | 35,339 | 15,913 | 122.1% |
| Earnings Per Share (PKR) * | 117.19 | 49.32 | 137.6% |
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 7 of 17
LUCKY CEMENT
Local Cement Operations
In 1H FY24, our Company's cement dispatches reached 4.41 million tons, showing a 23% year-on-year (YoY) increase. This growth was primarily due to the addition of a new line in Pezu, a significant increase in exports, and a lower base in the previous year, which was impacted by factors such as floods, rain, and smog-related shutdowns, hindering construction activities nationwide. Export dispatches, increased by 59% in 1H FY24 compared to the SPLY, while local dispatches saw a 16% increase.
Foreign Cement Operations
The cement production facilities in Iraq and Congo, operated under joint venture agreements, continued to enhance the Group's profitability with increased margins. Iraq's cement demand improved, while Congo's demand remained stable. Additionally, full capacity utilization at Najmat-Al-Samawah, in Iraq, and the conversion of the Kiln from HFO to Gas, further boosted your Company's profitability.
Polyester, Soda Ash, & Chemicals
The Net Turnover for 1H FY24 was PKR 60.2 billion, 22% higher compared to the SPLY. Net Turnover for Chemical & Agri Sciences, Pharmaceuticals, Soda Ash, Polyester and Animal Health businesses increased by 49%, 30%, 26%, 12% and 2% respectively as compared to the SPLY.
The Operating Result for the same period was PKR 8.1 billion, 53% higher than the SPLY. The Chemicals & Agri Sciences, Pharmaceuticals, Soda Ash, Animal Health and Polyester businesses delivered higher Operating Results by 202%, 72%, 46%, 12% and 7% respectively as compared to the SPLY. The Soda Ash business's performance was mainly driven by higher export volumes following the completion of the 60,000 tons per annum (TPA) expansion project in the previous year. The Polyester business showed recovery, despite slow off-take in downstream markets due to a bleak global economic situation amidst monetary tightening and high energy tariffs.
During this period, the subsidiary's Board of Directors granted an in-principle approval for a capacity expansion of 200,000 TPA at the Company's Soda Ash plant in Khewra, Punjab. Following the successful completion of the proposed expansion, the total installed capacity of the Soda Ash plant will increase from the current 560,000 TPA to 760,000 TPA.
The subsidiary entered into a Share Purchase Agreement with Lotte Chemicals Corporation on January 26, 2023, which was subsequently assigned to Lucky Core Ventures (Private) Limited (LCV) (wholly owned subsidiary) for the acquisition of approximately 75.01% of the issued share capital of Lotte Chemical Pakistan Limited, comprising 1,135,860,105 ordinary shares. On January 12, 2024, this agreement was terminated by LCV, as the conditions required for completion could not be met within the stipulated time frame. Consequently, LCV decided not to proceed with the transaction.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 8 of 17
LUCKY CEMENT
Automobiles & Mobile Phones
Since the beginning of July 2023, the automobile sector has experienced a sharp decline in volumes. This downturn is attributable to several factors including currency fluctuations, the introduction of 1% CVT on cars with an engine capacity of 1300 CC and above, increased Sales Tax rates from 17% to 25% on cars with engine capacity of 1400 CC and above and for SUVs regardless of their engine capacities. Moreover, challenges have been compounded by high-interest rates, stricter auto financing regulations by the State Bank of Pakistan (SBP), and rising inflation and fuel prices. During 1H FY24, the automobile sector observed an overall volume decline of more than 50% compared to SPLY.
However, the mobile phone market has seen an overall improvement during this period compared to SPLY. This was attributable to improved supply situation following the lifting of import restrictions on mobile phone SKD kits by the government.
Power
LEPCL commenced its commercial operations in March 2022 and is currently in its second year of operation. The plant completed 3.4 million safe manhours without any loss of time due to injury (since inception) during this 1H FY24. The plant also successfully completed its second annual maintenance shutdown during this quarter, undertaking several jobs for further improvement in plant operations. Having addressed most performance related issues in the first year, the plant has maintained 100% commercial availability throughout 1H FY24.
Cement Industry & Company's Performance - Unconsolidated
The local cement demand in Pakistan recorded modest growth of 1.0% YoY, reaching 20.24 million tons for the half year ended December 31, 2023, vs. 20.03 million tons during the SPLY. Notably, exports witnessed a substantial surge of 110.7%, totaling 3.65 million tons during the 1H FY24, up from 1.7 million tons in the SPLY. Consequently, the overall industry volume grew by 9.8% reaching 23.89 million tons in the period under review compared to 21.76 million tons in the SPLY. This boost in sales volumes can be attributed to increased viability of exports, together with a lower base of domestic sales in the previous year, which was impacted by widespread rains, unprecedented floods, and an overall economic slowdown.
Compared to the cement industry, your Company experienced a 23.4% increase in overall sales volume, reaching 4.4 million tons, as compared to 3.6 million tons in the SPLY. Local sales volume grew by 16.3%, reaching 3.5 million tons during 1H FY24, compared to 3.0 million tons in the SPLY. Furthermore, export volumes increased by 59.4%, to 0.94 million tons during the period under review, in contrast to 0.59 million tons in the SPLY.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 9 of 17
LUCKY CEMENT
Cement Production & Sales Volume Performance
The local cement production and sales statistics of your Company for the half year ended December 31, 2023, compared to the SPLY are as follows:
| Particulars | 1H FY24 | 1H FY23 | Growth / (Decline) |
|---|---|---|---|
| Tons in '000' | % | ||
| Clinker Production | 4,607 | 3,075 | 49.8% |
| Cement Production | 3,997 | 3,379 | 18.3% |
| Cement / Clinker Sales | 4,408 | 3,572 | 23.4% |
A comparison of Pakistan's Cement Industry and your Company's dispatches for the half year ended December 31, 2023, in comparison with SPLY, is presented below:
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 10 of 17
LUCKY CEMENT
| Particulars
(Tons in '000') | 1H FY24 | 1H FY23 | Change % | |
| --- | --- | --- | --- | --- |
| Cement Industry | | | | |
| Local Sales | 20,237 | 20,029 | 208 | 1.0% |
| Export Sales | | | | |
| - Bagged | 1,817 | 1,249 | 568 | 45.5% |
| - Loose | 21 | 10 | 11 | - |
| - Clinker | 1,815 | 475 | 1,340 | 282.2% |
| Total Exports | 3,653 | 1,734 | 1,919 | 110.7% |
| Grand Total | 23,890 | 21,763 | 2,127 | 9.8% |
| Lucky Cement | | | | |
| Local Sales | | | | |
| - Cement | 3,345 | 2,982 | 363 | 12.2% |
| - Clinker | 124 | - | 124 | - |
| | 3,469 | 2,982 | 487 | 16.3% |
| Export Sales | | | | |
| - Bagged | 621 | 399 | 222 | 55.5% |
| - Loose | 21 | 10 | 11 | - |
| - Clinker | 297 | 180 | 117 | 65.1% |
| Total Exports | 939 | 589 | 350 | 59.4% |
| Grand Total | 4,408 | 3,572 | 837 | 23.4% |
| Market Share | 1H FY24 | 1H FY23 | Change % | |
| Local Sales | 16.5% | 14.9% | 11.0% | |
| Export Sales | | | | |
| - Bagged | 34.2% | 32.0% | 6.9% | |
| - Loose | 100.0% | 100.0% | - | |
| - Clinker | 16.4% | 37.9% | (56.7%) | |
| Total Export | 25.7% | 34.0% | (24.4%) | |
| Grand Total | 17.9% | 16.4% | 9.3% | |
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 11 of 17
LUCKY CEMENT
Financial Performance - Unconsolidated
The unconsolidated financial performance of your Company for the half year ended December 31, 2023, as compared to the SPLY is presented below:
| PKR million except EPS | 1H FY24 | 1H FY23 | Change (%) |
|---|---|---|---|
| Gross Revenue | 79,264 | 58,706 | 35.0% |
| Net Revenue | 59,880 | 45,333 | 32.1% |
| Cost of Sales | 38,060 | 32,810 | 16.0% |
| Gross Profit | 21,820 | 12,523 | 74.2% |
| GP as % of Net Revenue | 36.4% | 27.6% | 31.9% |
| Operating Profit | 17,054 | 8,950 | 90.5% |
| EBITDA | 18,593 | 11,351 | 63.8% |
| Net Profit | 13,710 | 7,129 | 92.3% |
| EPS | 45.47 | 22.09 | 105.8% |
Revenue
During the half year under review, your Company's overall gross revenue increased by 35% as compared to the SPLY. As explained above, the local sales revenue increased by 32% (PKR 68.9 billion vs PKR 52.1 billion) and export sales revenue increased by 57% (PKR 10.3 billion vs PKR 6.6 billion).
Cost of Sales
During the half year under review, the cost of sales increased by 16% to PKR 38.06 billion as compared to PKR 32.8 billion in the SPLY. The major reason for this increase was higher production and sales volume compared to SPLY.
Gross Profit
The gross profit margin of your Company for 1H FY24 is 36.4% compared to 27.6% in the SPLY. Your Company's constant focus on cost and operational efficiencies over the years has led to an increase in margins.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
YBG
Page 12 of 17
LUCKY CEMENT
Dividend Income
During 1H FY24, the dividend income received by your Company from its subsidiaries / associates was PKR 3.2 billion vs PKR 1.6 billion during the SPLY.
| Subsidiary/ | |||||||
|---|---|---|---|---|---|---|---|
| Associate | 2Q FY24 | 1Q FY24 | 4Q FY23 | 3Q FY23 | 2Q FY23 | 1Q FY23 | 4Q FY22 |
| PKR Billion | |||||||
| LCI | - | 1.7 | - | 0.5 | - | 0.8 | - |
| LHL | - | - | - | 0.2 | - | - | 0.1 |
| YEL | - | 0.1 | - | 0.1 | 0.1 | - | - |
| LMC | 1.4 | - | - | - | - | 0.7 | - |
| Total | 1.4 | 1.8 | 0.0 | 0.8 | 0.1 | 1.5 | 0.1 |
Net Profit
Your Company achieved a profit before tax of PKR 20.6 billion during 1H FY24 as compared to PKR 10.1 billion reported during the SPLY.
Accordingly, an after-tax profit of PKR 13.7 billion was achieved during the half-year under review as compared to PKR 7.1 billion reported during the SPLY.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
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LUCKY CEMENT
Earnings Per Share (EPS)
The earnings per share of your Company for 1H FY24 was PKR 45.47 in comparison to PKR 22.09 reported during the SPLY.
Growth & Expansion
Share Buyback of Lucky Cement Limited
In 1Q FY23, the Company announced a share buy-back of up to 10 million ordinary shares, which was approved by the shareholders in an EOGM dated September 20, 2022. This purchase made from the Pakistan Stock Exchange Limited (PSX) at prevailing spot prices was completed within the stipulated time at an average price of PKR 435.6 per share.
In a move to create further value for shareholders, the Company announced a second buy-back of up to 23.8 million ordinary shares in 4Q FY23, which was subsequently approved by the shareholders in the EOGM held on May 24, 2023. By November 20, 2023, 20.4 million ordinary shares were purchased at an average price of PKR 632.6 per share, marking the completion of the prescribed time limit for the second buy-back
Renewable Energy Initiatives
Your Company is committed to energy conservation and promotion of green energy resources, as demonstrated by the following new renewable energy projects:
-
Wind Energy at Karachi Plant:
The Company has embarked on a 28.8 MW captive wind power project at its Karachi Plant, expected to be completed by 1Q FY25. -
Expansion of solar capacity at Karachi & Pezu Plant:
The solar capacities at the Karachi and Pezu Plants are being increased by 6.3 MW and 6 MW respectively and will be completed during the current financial year. This expansion will increase the solar capacity of your Company to 74.3 MW.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
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The completion of the above projects will bring the total renewable energy generation capacity of your Company to 103.1 MW.
Corporate Social Responsibility
Your Company is steadfast in supporting education, women's empowerment, health, environmental conservation, and community development as part of its Corporate Social Responsibility (CSR) initiatives.
Education / Scholarships:
Committed to providing quality education to deserving segments of society, the Company has initiated Intermediate scholarships in District Lakki Marwat and awarded merit-based scholarships at leading universities in Pakistan.
Your Company maintains its collaboration with respected non-profit organizations like the Shahid Afridi Foundation, Million Smiles Foundation, and The Citizen Foundation, focusing on improving primary level education throughout the Country for underprivileged children.
The Company has also launched dedicated scholarship programs and vocational training initiatives, along with adopting new schools in Taobat and Kundal Shahi, Neelum Valley.
Women Empowerment:
Your Company continues to support girls' education and continues its collaboration with Zindagi Trust, transforming government girls' schools in Karachi.
Health Initiatives:
Your Company ensures the provision of quality healthcare for society. This commitment is demonstrated through financial support to the Aziz Tabba Foundation, a renowned philanthropic institution that operates the Tabba Heart and Tabba Kidney institutes. These institutes are crucial in bridging the gap in specialized and contemporary medical care available in the country.
Social Empowerment:
Your Company made a generous donation to a renowned NGO to empower orphans by providing them with a sense of belonging and facilitating their integration into society. The organization's objective is to establish a fully equipped facility to meet their residential and educational needs.
In its dedication to Diversity, Equality, and Inclusivity, your Company actively supports differently-abled individuals. This commitment is exemplified through donations to a reputable NGO, specifically directed towards providing Therapy and Training for individuals with Autism Spectrum Disorder (ASD).
Your Company generously donated a Country's leading NGO, Special Olympics Pakistan, which is working towards the prospects of acknowledging and to spread compassion & acceptance and transform the lives of people with Intellectual Disabilities through the 'Power of Sports'.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
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LUCKY CEMENT
Environmental Conservation:
Your Company understands its environmental responsibilities and persists with its eco-friendly initiatives, such as tree-planting campaigns near its manufacturing sites to reduce dust emitted from cement operations.
Community Development:
In an effort to secure clean water access for local communities, your Company has initiated a Water Supply Scheme in Pezu, including the solarization of tube wells. Additionally, the Company is also supporting the villages nearby its manufacturing facilities for provision of clean water.
Outlook
The current fiscal year continues to be marked by economic and political challenges. Additionally, the general elections outcome will play a crucial role in determining economic growth and investor confidence.
Furthermore, the ongoing Palestinian conflict poses potential far-reaching repercussions for global economies. The complete extent of the conflict's outcome is expected to become clearer over time.
Local Cement Operations
Domestic cement demand grew by only 1% during 1H FY24 over the SPLY. Challenges of high inflation and elevated interest rates and seasonal factors are expected to impact cement demand during 2H FY24. Post-election political stability, could direct resources towards development projects, and stimulate local cement demand in the medium term.
Your Company's management remains proactive in enhancing manufacturing efficiency, and investing in renewable energy. This strategic approach not only aims to reduce production costs but also aligns with our commitment to contributing to a more sustainable future.
Foreign Cement Operations
Strong demand is anticipated for international cement operations and the companies are well-positioned to benefit from increased utilization of existing operational lines in the forthcoming financial periods. Moreover, the addition of a new clinker line, with a capacity of 1.82 MTPA, in Samawah, Iraq, will greatly enhance the operational efficiencies of our business. This strategic move plays a crucial role in achieving self-reliance in terms of clinker availability within Iraq.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
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LUCKY CEMENT
Polyester, Soda Ash, & Chemicals
Looking ahead, the economic outlook will be shaped by the continued implementation of reforms aimed at stabilising the economy to restore fiscal and external buffers, restoration of political stability, assistance from friendly nations, alongside continuance of the IMF programme. However, these measures will keep demand in check and inflation high in the short term. The above factors will continue to impact overall industrial activity and the demand for LCI's products. The subsidiary remains committed to leveraging its diverse product portfolio and implementing cost rationalization efforts to minimise any adverse impacts and deliver sustainable results.
Automobiles & Mobile Phones
The outlook for the automobile sector is sluggish, with sales volumes under pressure due to economic slowdown and higher taxes on cars and SUVs, and fluctuations in the PKR to USD parity. However, the subsidiary's focus on optimizing its operations and localization will help reduce reliance on imported components and protecting margins and enhancing competitiveness.
The mobile industry is expected to show recovery due to higher sales of low-end mobile phones. LMC has already shifted its focus on producing and promoting low-cost phones.
Power
As warm weather sets in, we expect to see an increase in countrywide power demand resulting in higher dispatch of electricity from the subsidiary's plant.
Your Company's strong financial position and free cash flow generating ability are anticipated to further support its vision to maintain its leadership position in Pakistan and to capitalize on new investment opportunities to maximize shareholders' value.
Acknowledgment
The Board expresses gratitude to all employees of the Company for their efforts and commitment throughout this period. The Board further appreciates the support and trust of all shareholders of the Company and its customers, suppliers and external partners. The confidence and goodwill of all stakeholders has allowed the Company to sustain and grow over the years.
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
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LUCKY CEMENT
We pray to Allah for the success of the Company and the well-being of all stakeholders, and the country. May the times ahead bring peace and prosperity for the Company and all people associated with it.
On behalf of the Board
MUHAMMAD ALI TABBA
Chief Executive / Director
Karachi: January 25, 2024
Lucky Cement Limited
6-A, Mohammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350.
U.A.N: 111-786-555 F: 34534302 E: [email protected]
URL: www.lucky-cement.com
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