LUCK’s topline surges 66% YoY due to greater contribution from Kia Lucky Motors Ltd

October 26, 2020 (MLN): Lucky Cement Limited has reported a remarkable 3.36x increase in net profits to Rs 5.13 billion for 1QFy21 against the profits of Rs 1.5 billion earned in the same quarter last year.

This caused the company earnings per share to clock in at Rs 13.45 from Rs 3.93 in 1QFY20, depicting a mammoth growth of 242.2% YoY.

As per the company’s financial statement, the increase in net profit was mainly attributable to increase in Net Profit of Cement segment (holding company) which increased by 132% due to absorption of fixed costs and lower input costs. This increase in Net Profit of holding company was also supported by significant increase in Net Profits of Lucky Motor Corporation and LCL investment Holdings limited as compared to same period last year.

The better market conditions and increase in economic activities, helped to increase the Net Profit of LCL Investment Holdings Limited that is mainly attributable to a combination of growth in sales volume, increase in retention price and decrease in input costs from north Congo and Iraq projects.

On the revenue front, LUCK’s net sales increased by 66% YoY due to greater contribution from Kia Lucky Motors Pakistan Ltd sales. Similarly, domestic cement business sales surged by 49% YoY on the back of higher dispatches (domestic/exports are up by 48/50% YoY) and improved domestic cement retention prices.

As a result, the company achieved gross profits of Rs 8.7 billion, which was 102% YoY higher as compared to same period last year’s gross profits of Rs 4.3 billion.

Furthermore, owing to strong topline growth alongside soft coal prices which offset the impact of PKR depreciation and costs associated with the company’s new line, the Gross profits margins increased by 3ppts YoY during 1QFY21.

On the cost side, LUCK’s distribution expenses increased by 23% YoY due to increase in transportation cost, while the financial charges fell by 32% YoY due to the reduction in policy rate.

Moreover, the company booked an affective taxation at 13% during the quarter under review compared to 25% in the corresponding quarter last year.

Alongside financial results, the company also informed that with the outbreak of COVID-19, construction and supply contractors of LUCK’s 660MW coal-based power plant declared a Force Majeure Event (FME) inFeb’20, fore warning a potential delay in project COD. Whereas the Central Power Purchasing Agency (CPPA) also sent a FME notice to the company, a report by Arif Habib Limited cited.

Currently LUCK is contact with CPPA, NTDC and PPIB to secure an interconnection facility at the earliest. That said, the company is striving to commence operations on time (targeted timeline: Mar’21) with over 90% work completed on the projected as at end of the outgoing quarter.

The 1.2mn tons Greenfield clicker facility in the city of Samawah, Iraq is in the commissioning and testing phase with commercial operations targeted in Dec’20. As the airspace opened up, the company was able to mobilize additional manpower to the site. While the remaining shipments of electrical and instrumental equipment are expected to reach site in Oct / Nov’20, the report added.

Consolidated Profit and Loss for the Quarter ended September 30th, 2020 ('000 Rupees)

 

Sep-20

Sep-19

% Change

Revenue

                     57,850,843

                     34,429,646

68.0%

 Sales tax and excise duty

                     (7,886,485)

                     (5,683,102)

38.8%

Rebates and commission

                     (4,850,591)

                     (1,566,605)

209.6%

Net sales

                     45,113,767

                     27,179,939

66.0%

Cost of Sales

                  (36,340,792)

                  (22,836,297)

59.1%

Gross Profit

                       8,772,975

                       4,343,642

102.0%

Distribution cost

                     (2,278,104)

                     (1,846,745)

23.4%

Administrative expenses

                     (1,196,494)

                     (1,018,820)

17.4%

Finance cost

                        (425,619)

                        (625,003)

-31.9%

Other expenses

                        (483,944)

                        (191,640)

152.5%

Other income

                       1,507,934

                       1,385,695

8.8%

Profit before taxation

                       5,896,748

                       2,047,129

188.0%

Taxation

 

 

 

current

                        (894,783)

                        (748,827)

19.5%

Deferred

                           130,270

                           228,721

-43.0%

 

                        (764,513)

                        (520,106)

47.0%

Profit after taxation

                       5,132,235

                       1,527,023

236.1%

Earnings per share – Basic and Diluted (Rupees)

                               13.45

                                  3.93

242.2%

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Posted on: 2020-10-26T11:39:00+05:00

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