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3rd Quarter Results

24th Apr 2017 12:52

RNS Number : 1436D

Lucky Cement Limited

24 April 2017

LCL/ANNO/2015-16/ April 22, 2017

The General Manager

Pakistan Stock Exchange

Limited

Karachi

The Deputy Chief

Securities & Exchange

Commission of Pakistan

Islamabad

The London Stock Exchange

10 Paternoster

Square,

London

Dear Sir(s)

FINANCIAL RESULTS FOR THE 3RD QUARTER ENDED MARCH 31, 2017

This is to inform you that the Board of Directors of our Company in their Meeting held on Saturday, April 22, 2017 at 11:30 a.m., at 6-A, Muhammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350 recommended the following:

(I) Cash Dividend Nil

(ii) Bonus Issue Nil

(iii) Right Issue Nil

(iv) Interim Dividend Nil

The financial results of the Company consisting of Balance Sheet, Profit and Loss Account and Directors' Report are annexed.

We will be sending you the requisite copies of printed financial statements in due course of time.

Yours truly

for LUCKY CEMENT LIMITED

MUHAMMAD FAISAL

Executive Director and

Chief Strategy, Finance & Investment Officer

Unconsolidated Condensed Interim Balance Sheet
As at March 31, 2017

		March 31,	June 30,
		2017	2016
		(Un-audited)	(Audited)
		(PKR in'000')
ASSETS
	NON-CURRENT ASSETS
	Fixed Assets
	Property, plant and equipment	35,685,775	33,887,375
	Intangible assets	90,923	126,549
		35,776,698	34,013,924

	Long-term investments	12,625,020	12,422,020
	Long-term loans and advances	89,331	75,570
	Long-term deposits	3,175	3,175
		48,494,224	46,514,689
CURRENT ASSETS
	Stores and spares	6,973,851	5,993,969
	Stock-in-trade	1,712,059	1,588,469
	Trade debts	1,571,384	2,181,788
	Loans and advances	440,758	447,049
	Trade deposits and short term prepayments	63,104	52,038
	Accrued profit	114,061	125,984
	Other receivables	1,039,666	1,274,026
	Tax refunds due from the Government	538,812	538,812
	Short term investments	-	400,000
	Cash and bank balances	33,964,307	26,805,582
		46,418,002	39,407,717

TOTAL ASSETS		94,912,226	85,922,406

EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES


Authorized capital		5,000,000	5,000,000

Share capital		3,233,750	3,233,750
Reserves		73,277,178	66,089,088
		76,510,928	69,322,838
NON-CURRENT LIABILITIES
	Long-term deposits	75,526	70,666
	Deferred liabilities	7,516,656	6,898,078
		7,592,182	6,968,744
CURRENT LIABILITIES
	Trade and other payables	9,501,752	8,563,850
	Taxation - net	1,307,364	1,066,974
		10,809,116	9,630,824


TOTAL EQUITY AND LIABILITIES		94,912,226	85,922,406

Unconsolidated Condensed Interim Profit and Loss Account
For the 3rd quarter and nine months ended March 31, 2017 (Un - audited)

		Nine Months Ended		Quarter Ended
		March 31,	March 31,	March 31,	March 31,
		2017	2016	2017	2016
		(PKR in'000')		(PKR in'000')

Gross sales		47,291,416	41,259,823	16,048,908	14,562,492

Less:	Sales tax and excise duty	11,523,809	7,319,095	4,063,627	2,746,332
	Rebates and commission	526,476	509,164	185,824	193,025
		12,050,285	7,828,259	4,249,451	2,939,357

Net sales		35,241,131	33,431,564	11,799,457	11,623,135

Cost of sales		(18,289,927)	(17,593,771)	(6,514,414)	(5,960,882)

Gross profit		16,951,204	15,837,793	5,285,043	5,662,253

Distribution cost		(1,399,721)	(1,487,564)	(361,763)	(456,881)
Administrative expenses		(758,517)	(827,365)	(251,366)	(247,969)
Finance costs		(9,274)	(8,644)	(2,370)	(3,037)
Other charges		(1,575,331)	(1,136,913)	(418,762)	(417,867)
Other income		1,460,442	1,017,819	511,585	356,643

Profit before taxation		14,668,803	13,395,126	4,762,367	4,893,142

Taxation
	-current	(3,770,955)	(3,324,517)	(997,381)	(1,289,455)
- deferred	-deferred	(476,008)	(456,403)	(380,562)	(244,420)
		(4,246,963)	(3,780,920)	(1,377,943)	(1,533,875)

Profit after taxation		10,421,840	9,614,206	3,384,424	3,359,267

Other comprehensive income for the period		-	-	-	-

Total comprehensive income for the period		10,421,840	9,614,206	3,384,424	3,359,267

		(PKR)		(PKR)

Earnings per share - basic and diluted		32.23	29.73	10.47	10.39

Condensed Interim Consolidated Balance Sheet
As at March 31, 2017 (Un-audited)
		March 31,	June 30,
		2017	2016
		(Un-audited)	(Audited)
		(PKR in'000')
ASSETS
NON-CURRENT ASSETS
	Fixed assets
	Property, plant and equipment	55,191,638	52,357,646
	Intangible assets	7,450,187	7,022,261
		62,641,825	59,379,907

	Long-term investments	11,040,151	10,654,528
	Long-term loans and advances	481,095	433,207
	Long-term deposits and prepayments	47,492	39,939
		74,210,563	70,507,581
CURRENT ASSETS
	Stores, spares and consumables	8,086,032	7,016,458
	Stock-in-trade	8,081,182	6,905,826
	Trade debts	3,996,806	3,821,855
	Loans and advances	999,229	852,484
	Trade deposits and short-term prepayments	572,700	485,469
	Accrued mark-up on deposit accounts	125,481	126,286
	Other receivables	2,475,910	2,098,339
	Tax refunds due from the Government	538,812	538,812
	Taxation - net	-	1,152,299
	Short term investments	-	400,000
	Cash and bank balances	35,469,542	28,448,471
		60,345,694	51,846,299

TOTAL ASSETS		134,556,257	122,353,880

EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES


Share capital		3,233,750	3,233,750
Reserves		79,372,530	70,337,188
	Attributable to the owners of
	the Holding Company	82,606,280	73,570,938
	Non-controlling interests	8,559,829	7,888,373
	Total equity	91,166,109	81,459,311

NON-CURRENT LIABILITIES
	Long-term finances	8,451,612	8,741,955
	Finance lease liability	12,125	-
	Long-term deposits	75,526	70,666
	Deferred liabilities	10,379,065	9,916,313
		18,918,328	18,728,934
CURRENT LIABILITIES
	Trade and other payables	21,475,372	18,532,947
	Taxation - net	137,292	-
	Accrued mark-up	124,049	146,321
	Short-term borrowings and running finance	2,206,546	1,937,184
	Current portion of finance lease liability	5,690	-
	Current portion of long-term finance	522,871	1,549,183
		24,471,820	22,165,635

	TOTAL EQUITY AND LIABILITIES	134,556,257	122,353,880

Condensed Interim Consolidated Profit and Loss Account
For the 3rd quarter and nine months period ended March 31, 2017 (Un-audited)

		Nine Months Ended		Quarter Ended
		March 31,	March 31,	March 31,	March 31,
		2017	2016	2017	2016
		(PKR in'000')		(PKR in'000')

Gross sales		82,425,546	72,878,144	28,548,300	25,312,147

Less:	Sales tax and excise duty	13,525,363	9,537,683	4,760,378	3,509,795
	Rebates and commission	3,234,518	2,621,500	1,178,691	939,589
		16,759,881	12,159,183	5,939,069	4,449,384

Net sales		65,665,665	60,718,961	22,609,231	20,862,763

Cost of sales		(43,183,155)	(40,391,732)	(15,287,224)	(13,642,561)

Gross profit		22,482,510	20,327,229	7,322,007	7,220,202

Distribution costs		(3,161,148)	(2,842,546)	(1,029,497)	(918,878)
Administrative expenses		(1,584,964)	(1,518,837)	(546,708)	(474,562)
Finance costs		(526,852)	(657,544)	(162,701)	(188,739)
Other charges		(1,834,002)	(1,351,176)	(510,628)	(491,255)
Other income		2,605,366	1,985,925	864,382	700,993

Profit before taxation		17,980,910	15,943,051	5,936,855	5,847,761

Taxation
	- current	(4,519,165)	(3,899,151)	(1,199,290)	(1,514,594)
- deferred	- deferred	(406,036)	(234,147)	(422,027)	(177,098)
		(4,925,201)	(4,133,298)	(1,621,317)	(1,691,692)

Profit after taxation		13,055,709	11,809,753	4,315,538	4,156,069

Attributable to:
Owners of the Holding Company		12,052,781	11,031,884	3,930,038	3,862,416
Non-controlling interests		1,002,928	777,869	385,500	293,653

		13,055,709	11,809,753	4,315,538	4,156,069

Other comprehensive income for the period

	Foreign exchange differences on translation of foreign operations	852	144,691	14,191	1,432

	Items to be reclassified to profit or loss in subsequent periods:
	Loss on hedge during the period	-	(2,285)	-	-
	Income tax relating to hedging reserve	-	731	-	-
		-	(1,554)	-	-

	Adjustments for amounts transferred to initial carrying amounts of hedged item - capital work-in-progress
		-	1,554	-	-

Total comprehensive income for the period		13,056,561	11,954,444	4,329,729	4,157,501

Attributable to:
Owners of the Holding Company		12,053,633	11,176,575	3,944,229	3,863,848
Non-controlling interests		1,002,928	777,869	385,500	293,653

		13,056,561	11,954,444	4,329,729	4,157,501

		(PKR)		(PKR)

Earnings per share - basic and diluted		37.27	34.11	12.15	11.94

Directors' Report:

The Directors of your Company have the pleasure in presenting to you the financial results of your Company which include both, stand-alone and consolidated unaudited financial statements for the nine months ended 31st March 2017.

Overview:

Cement industry in Pakistan grew by 6.9% to 30.30 million tons during the nine months ended 31st March 2017 compared to 28.35 million tons during the same period last year. While local sales volume registered a growth of 10.9% to 26.55 million tons during the nine months period compared to 23.94 million tons during the same period last year; export sales volume registered a decline of 14.8% to 3.75 million tons during the current nine months compared to 4.41 million tons during the same period last year.

Your Company achieved an overall growth of 8.4% to 5.53 million tons during the nine months ended compared to 5.11 million tons sold in the same period last year. While local sales volume of your Company registered a growth of 18.6% to 4.60 million tons during the current nine months compared to 3.88 million tons during the same period last year; export sales volume declined by 23.9% to 0.93 million tons during the current nine months compared to 1.23 million tons during the same period last year.

The EPS for the current nine months was recorded at PKR 32.23 which is 8.4% higher than the same period last year's EPS of PKR 29.73.

Business Performance

a. Production & Sales Volume Performance

The production and sales statistics of your Company for the nine months ended 2016-17 compared to the same period last year are as follows:




Clinker Production	5,119	4,966	3.1%
Cement Production	5,209	5,089	2.4%
Cement Sales	5,246	5,106	2.7%
Clinker Sales	288	-	100%

The production and sales volume data is graphically presented as under:

A comparison of the dispatches of the industry and your Company for the nine months ended 2016-17 with the same period last year is presented below:




Cement Industry
Local Sales	26,551	23,941	2,610	10.9%
Export Sales
- Bagged	3,590	4,322	(732)	(16.9%)
- Loose	163	85	78	91.8%
Total Exports	3,753	4,407	(654)	(14.8%)
Grand Total	30,304	28,348	1,956	6.9%

Lucky Cement
Local Sales
- Cement	4,311	3,878	433	11.2%
- Clinker	288	-	288	100%
Total Local Sales	4,599	3,878	721	18.6%
Export Sales
- Bagged	772	1,143	(371)	(32.5%)
- Loose	163	85	78	91.8%
Total Exports	935	1,228	(293)	(23.9%)
Grand Total	5,534	5,106	428	8.4%


Local Sales	17.3%	16.2%	6.8%
Export Sales
- Bagged	21.5%	26.5%	(18.9%)
- Loose	100.0%	100.0%	0.0%
Total Export	24.9%	27.9%	(10.8%)
Grand Total	18.3%	18.0%	1.7%

b. Financial Performance

The financial performance of your Company for nine months ended 2016-17 compared to the same period last year is presented below:


Gross Revenue	47,291	41,260	14.6%
Net Revenue	35,241	33,432	5.4%
GP	16,951	15,838	7.0%
OP	14,793	13,523	9.4%
EBITDA	16,755	15,429	8.6%
NP	10,422	9,614	8.4%
EPS	32.23/Share	29.73/ Share	8.4%

Revenue During the nine months 2016-17 under review, your Company achieved an overall net sales revenue growth of 5.4% compared to xsame period last year. This was mainly attributable to increase in sales volumes.	Cost of Sales During the period under review, per ton cost of sales of your Company decreased by 4.0% compared to same period last year. The decrease was mainly attributable to positive impact of WHR Kiln at Pezu and improved capacity utilization.
Distribution of Gross Revenue		Distribution of Cost of Sales

Gross Profit Your Company was able to improve its gross profit margin to 48.1% for the nine months period of 2016-17 under review compared to 47.4% reported during the same period last year.
Net Profit Your Company achieved profit before tax of PKR 14,668.8 million during the current nine months under review compared to PKR 13,395.1 million reported during the same period last year. Similarly, after tax profit of PKR 10,421.8 million was achieved during the nine months under review compared to PKR 9,614.2 million reported during the same period last year.
Earnings per share The earnings per share of your Company for the nine months ended 31st March 2017 was PKR 32.23 compared to PKR 29.73 reported during the same period last year.

Projects - New and Ongoing

Brownfield Expansion (Installation of additional Line of 1.25 million tons per annum) at Karachi Plant

The construction work at project site is in full swing to achieve commercial operations date of December 2017.

Fully integrated green field Cement Plant in Punjab Province of Pakistan - 2.3 million tons per annum

Your Company is still in the process of seeking approvals and necessary authorizations from the Government of Punjab for commencement of this project.

10 MW WHR at PEZU Plant - Kiln

The plant was successfully commissioned and started operations in January 2017.

Investment in automotive Manufacturing plant under license from KIA Motors Corporation

The project company [Kia Lucky Motors Pakistan Limited] has entered into the Technical Collaboration Agreement with Kia Motors Corporation. Application has been submitted to the Board of Investment (BOI) as a new entrant under Category "A" (Greenfield Investment) which is expected to be approved by the end of April 2017.

Investments

Investment in 1 x 660 MW, supercritical, coal based power project

Your company has executed EPC contract and finalized draft of the Power Purchase Agreement and Implementation Agreement and also received intimation for coal allocation from Sindh Engro Coal Mining Company (SECMC). The target to achieve financial close is September 2017 and Commercial Operation Date by December 2020.

The consolidated unaudited financial statements of the Company for the nine months ended 31st March 2017, include the net assets of LEPCL which is 100% indirectly owned subsidiary of the Company.

Brown field expansion in Cement Grinding unit in Republic of Iraq - 0.871 million tons per annum

First 50% of the capacity expansion [0.4355 million tons] in Iraq grinding unit is expected to come online by August 2017 whereas the remaining 50% of the capacity expansion [0.4355 million tons] is expected to come online by October 2017.

Corporate Social Responsibility

Your Company is fully committed in value creation for the society it operates in. During the third financial quarter under review, your Company extended a number of scholarships to

students from various leading universities in Pakistan. With an emphasis on empowering women in the country, Lucky Cement continued its support for the two leading Government girls' schools in Karachi in collaboration with Zindagi Trust. With this support, your Company intends to transform these government girls' schools into model educational campuses for the country. Additionally, your Company also donated generously for the efficient maintenance of the Hub School.

Ensuing its commitment of supporting quality health care projects in the country, your Company continued to extend its support to Aziz Tabba Foundation, which is one of the most prominent philanthropic institutions in Pakistan. Support was provided for the running of its two premium health care institutes in the country, namely Tabba Heart Institute and Tabba Kidney Institute. Furthermore, Lucky Cement also extended its support for the treatment of blind children through Pakistan Welfare Association of the Blind.

Outlook

Your Company remains optimistic about its domestic sales volumetric growth for the current financial year. Domestic sales are anticipated to maintain the current upward momentum during the last quarter as well, as witnessed during the nine months under review on the back of private and public sector construction projects as well as mega infrastructure development projects under the China-Pakistan Economic Corridor (CPEC) initiative. Your Company's strong and debt-free financial position and free cash flow generating ability would continue to support investments in projects and avenues which can bring in further operational efficiencies and enhance shareholders' value.

Acknowledgement

Your directors take this opportunity to express their deep sense of gratitude for all the stakeholders for their encouragement and support.

We would like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every member of the Lucky family.

And also our shareholders, who have always shown their confidence and faith in the Company.

On behalf of the Board

MUHAMMAD ALI TABBA

Chief Executive / Director

Karachi: April 22, 2017

This information is provided by RNS

The company news service from the London Stock Exchange

END

QRTLLFELSLISFID

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