LCI’s profit surges by 2.67x YoY in 9MFY23 despite macroeconomic headwinds

April 27, 2023 (MLN): Lucky core industries limited (PSX: LCI) has reported a whopping 2.67x YoY profit after tax of Rs14.63 billion [EPS: Rs158.45] for nine months ended March 31, 2023, when compared to the profit after tax of Rs5.46bn [EPS: Rs59.18] earned in the same period last year (SPLY).

Despite the macroeconomic challenges faced by the company during the period, like demand contraction in the downstream markets, cost-push due to the impact of higher oil prices, exchange losses due to devaluation of the Rupee, higher interest rates, business-specific import restrictions, and tax regime changes.

The company managed to rack in significantly higher profitability during the review period, mainly attributed to higher operating results and a gain of Rs9.84bn on the divestment of 26.5% of the issued and paid-up share capital of NMPL.

During the period under review, the company entered into a Share Purchase Agreement with Morinaga Milk Industry Co. Ltd., for a partial divestment of approximately 26.5% of the issued and paid-up share capital of NutriCo Morinaga (Private) Limited (NMPL)

Net Turnover for 9MFY23 was at Rs80.3bn up by 28.6% YoY SPLY. Whereas the Operating Result from continuing operations was at Rs10.41bn, higher by 19.7% YoY.

Meanwhile, the results were negatively impacted by a huge surge in finance costs that inflated by 3.49x YoY to stand at Rs1.85bn in 9MFY23 as compared to just Rs531.17m in SPLY, mainly due to higher interest rates.

Notably, the Board of Directors (BoD) of LCI approved a further investment of Rs1.55 billion for the Soda Ash business in Khewra in order to improve the efficiency and growth of the company.

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