October 27, 2022 (MLN): The net profits of Lucky Cement Limited (PSX: LUCK) for the first quarter of the fiscal year 2022-23 which ended on September 30, 2021, declined by 22% YoY to clock in at Rs7 billion [EPS: Rs16.85], compared to the profits of Rs8.85bn [EPS: Rs20.57] reaped in 1QFY22.
This contraction in net profit is attributable to the re-measurement gain of Rs1.8bn recorded by ICI, a subsidiary company, on the acquisition of a further 11% interest in NutriCo Pakistan (Pvt.) Limited thereby increasing its total holding from 40% to 51%.
According to the statement issued to PSX, the company achieved gross revenue of Rs107.2bn which is 54.8% higher as compared to the same period last year's (SPLY) revenue of Rs69.3bn.
The increase in gross revenue is primarily attributable to the commencement of commercial operations of Lucky Electric Power Company Limited in March 2022 and the manufacturing of mobile phones by Lucky Motor Corporation in December 2021.
Local Cement Operations
During the quarter under review, the company's overall gross sales revenue increased by 10.7% as compared to SPLY. Despite the reduction in volumes in both domestic and export sales, the profitability of the local cement operations improved marginally because of enhanced operational efficiencies.
Foreign Cement Operations
On the other hand, despite global recessionary pressure, the Group's foreign joint venture cement production facilities in Iraq and Congo continued to operate efficiently to add healthy profits to the Group's profitability.
Polyester, Soda Ash, and Chemicals
Net revenue for the quarter at Rs24.2bn is 33% YoY higher compared to the SPLY owing to strong performance by the Soda Ash business, delivering higher revenue by 84% versus the SPLY.
Revenues of the Polyester, animal health, and pharmaceuticals businesses were higher by 21%, 15%, and 4% respectively whereas the Chemical & Agri Sciences business witnessed a decline of 5% versus the SPLY.
The operating result of the animal health business recorded an increase of 5% from the SPLY whereas the polyester, pharmaceuticals, and chemical & agri sciences businesses witnessed a decline of 18%, 17%, and 42% respectively due to challenging economic conditions amidst Inflationary pressures and demand curtailment.
Lucky Electric Power Company Limited commenced its commercial operations in March 2022. During the current quarter, Company dispatched 764,916 GWh of electricity to the national grid. Due to the plant teething issues, availability for the quarter remained low at 78.4%. A
s a result of remedial measures taken by the management to improve the availability and performance of the plant, the financial performance will improve in the coming quarters. The average fuel cost of electricity for the quarter was Rs16.4per KWh, which is one of the cheapest in the country.
Automobiles and Mobile Phones
The automobile sector right from the start of July 2022 has witnessed a significant downturn in volumes on the back of the substantial devaluation of PKR to USD which led to an increase in the prices of cars.
Apart from this, other factors that caused a significant decline in automotive volumes include the State Bank of Pakistan's (SBP) requirement of prior approval for opening LCs for the import of CKD kits and parts, imposition of CVT 1% on cars having engine capacity exceeding 1300 CC high-interest rates and tightening of auto financing scheme by the SBF, high inflation and the significant increase in fuel prices.
The automobile sector has witnessed an overall decline of around 60% in terms of volumes during the current quarter compared to SPLY. Similarly, the mobile phone market also saw a 30% decline in volumes compared to SPLY as the SKD imports were impacted due to limited foreign exchange availability.
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Posted on: 2022-10-27T09:50:24+05:00
News Id :35631
