Lucky Cement observes a 46% decline in earnings due to lower margins and higher input costs

August 25, 2020 (MLN): Lucky Cement announced its financial results for the year ended June 30, 2020, on Tuesday, which showed that the company’s overall consolidated net profit declined by 45.9% as compared to the last year.

The earnings per share of the company for the year was Rs. 18.96 as compared to Rs. 35.03 reported in the last fiscal year.

The decrease in net profit was mainly attributable to a decrease in net profit of the Cement segment (Holding Company) which decreased by 79% due to lower margins and higher input costs. This decrease in Net Profit of holding company was partially offset by a significant increase in Net Profit from foreign operations (LCL Investments Holdings Limited) as compared to last year.

Despite challenging market and economic dynamics, the increase in Net Profit is mainly attributable to growth in sales volume, increase in cement prices and a decrease in input costs from both Congo and Iraq projects. While the profitability of ICI remained similar to last year, the increase in the Automobile segment’s profitability also contributed towards improving the consolidated profits.

The company’s overall gross sales revenue declined by 7.8% as compared to the same period last year. Where, although the export sales revenue showed an increase of 21.2% but the local sales revenue decline of 12.9% lead to the overall drop of 7.8% in the gross sales revenue.

The increase in the cost of sales of the company was mainly attributable to an exceptional increase in gas price, higher transportation costs on input materials, increased packaging material prices, and adverse rupee exchange rate parity. The higher cost impact was reasonably mitigated with a decline in international coal prices.

In view of the lower pricing and higher input costs, as mentioned above, the gross profit margins of the company were 14.5% as compared to 29.1% reported during the same period last year.

Financial Results for the year ended June 30, 2020 (Rupees'000)

 

Jun-20

Jun-19

% Change

Revenue

162,868,206

136,591,742

19.2%

Sales tax and excise duty

(32,210,557)

(22,304,398)

44.4%

Rebates and commission

(6,890,060)

(5,991,699)

15.0%

Net revenue

123,767,589

108,295,645

14.3%

Cost of sales

(104,810,654)

(84,506,680)

24.0%

Gross Profit

18,956,935

23,788,965

-20.3%

Distribution cost

(7,648,737)

(5,855,390)

30.6%

Administrative expenses

(4,221,555)

(3,274,843)

28.9%

Other expenses

(1,203,342)

(1,903,511)

-36.8%

Other income

2,376,253

2,999,637

-20.8%

Finance cost

(2,367,101)

(1,609,882)

47.0%

Share of profit – joint ventures and associates

3,038,446

1,012,870

200.0%

Profit before taxation

8,930,899

15,157,846

-41.1%

Taxation

(1,613,692)

(2,810,891)

-42.6%

Profit after taxation

7,317,207

12,346,955

-40.7%

Earnings per share

18.96

35.03

-45.9%

 

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Posted on: 2020-08-25T14:05:00+05:00

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