January 28, 2022 (MLN): Lucky Cement Limited (PSX: LUCK) has disclosed its financial performance for the half-year ended on December 31, 2021 today as per which the company posted net profits of Rs17.15 billion, jumped by almost 38% YoY against the profits of Rs12.44bn secured in 1HFY22.
This translates into an earning per share of Rs40.66 during the review period as compared to Rs32.05 in the same period last year (SPLY).
The surge in profitability is attributed to the growth in the topline led by a hike in retention prices in the North and South and government incentives for the construction sector which created buoyant cement demand.
Accordingly, net sales of the company during the year surged by around 29% YoY but the gross margins have tumbled to 20% owing to the boom in coal prices as cement players are unable to fully pass on the impact during the said time period.
It is pertinent to mention that the industry-wide local sales volume registered a growth of 1.9% to reach 24.07 million tons during the first half under review versus 23.62 million tons during the same period last year.
Export sales volumes showed a large decline of 32.5% to reach 3.39 million tons during 1HY 2021-22 compared to 5.02 million tons during the same period last year. As a result, the total cement sales of the industry declined by 4.1% to 27.46 million tons during the first half ended December 31, 2021, in comparison to 28.64 million tons during the same period last year.
The decline in overall dispatches is mainly attributed to a decline in export volumes on the back of volatility in coal prices and freight costs internationally, which have adversely impacted the viability of cement exports from Pakistan.
On the costs front, Luck’s admin expenses swelled by 13.6 YoY while its distribution cost rose by 11.2% YoY owing to the local dispatches.
The company saw a 90% increase in its other income to hit Rs6.3bn mainly due to the stellar performance of the company's chemicals business.
Apart from the one-off unrealized accounting gain recognized on the acquisition of controlling shares in NutriCo Pakistan amounting to Rs1.847 billion, the chemical business achieved considerable improvement in net profitability on account of impressive growth in its polyester, pharma and animal Health business segments.
In the automobile business, Lucky Motor Corporation introduced Kia Stonic in its lineup as well as started commercial production of Samsung branded mobile phones during the half year under review, which supported the growth in sales revenue.
Whereas, the profitability of the company's overseas operations increased mainly due to improvement in sales volume and operations of the company's Joint Venture Greenfield cement plant in Samawah, Iraq, which achieved its COD in March
On the taxation front, the company paid Rs3.36bn, up by 80.5% compared to the corresponding period last year.
|
Consolidated Profit and Loss for the half-year ended December 31, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
Dec-21 |
Dec-20 |
% Change |
|
|
Revenue |
154,502,628 |
123,717,385 |
24.9% |
|
Sales tax and excise duty |
(25,216,229) |
(22,555,576) |
11.8% |
|
Rebates and commission |
(5,906,646) |
(5,346,520) |
10.5% |
|
Net sales |
123,379,753 |
95,815,289 |
28.8% |
|
Cost of Sales |
(97,991,358) |
(75,604,492) |
29.6% |
|
Gross Profit |
25,388,395 |
20,210,797 |
25.6% |
|
Distribution cost |
(5,180,555) |
(4,658,432) |
11.2% |
|
Administrative expenses |
(3,426,343) |
(3,016,924) |
13.6% |
|
Finance cost |
(913,650) |
(761,823) |
19.9% |
|
Other expenses |
(1,642,868) |
(774,808) |
112.0% |
|
Other income |
6,292,087 |
3,309,440 |
90.1% |
|
Profit before taxation |
20,517,066 |
14,308,250 |
43.4% |
|
Taxation |
|||
|
current |
(3,570,969) |
(2,025,343) |
76.3% |
|
Deferred |
207,915 |
161,858 |
28.5% |
|
(3,363,054) |
(1,863,485) |
80.5% |
|
|
Profit after taxation |
17,154,012 |
12,444,765 |
37.8% |
|
Earnings per share – Basic and Diluted (Rupees) |
40.66 |
32.05 |
26.9% |
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