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3rd Quarter Results

7th May 2019 10:44

RNS Number : 3188X

Lucky Cement Limited

27 April 2019

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/3188X_1-2019-4-27.pdf

LCL/ANNO/2018-19/ April 26, 2019

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, 2019

This is to inform you that the Board of Directors of our Company in their Meeting held on Friday, April 26, 2019 at 3:30 p.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 Statements of Financial Position, Statements of Profit and Loss and Other Comprehensive Income and Directors' Report are annexed.

The 3rd quarterly report of the Company for the period ended March 31, 2019 will also be transmitted through PUCARS separately, within the specified time.

Yours truly

for LUCKY CEMENT LIMITED

IRFAN CHAWALA

Director Finance / CFO

		Unconsolidated Condensed Interim Statement of Financial Position
		As at March 31, 2019
			(Un-audited)	(Audited)
			March 31, 2019	June 30, 2018
			(PKR in '000')
ASSETS
NON-CURRENT ASSETS
	Fixed assets
	Property, plant and equipment		48,335,852	40,913,168
	Intangible assets		28,634	55,023
			48,364,486	40,968,191
	Long-term investments		33,252,760	24,981,078
	Long-term loans and advances		107,380	90,996
	Long-term deposits		3,175	3,175
			81,727,801	66,043,440
CURRENT ASSETS
	Stores and spares		7,396,331	7,783,111
	Stock-in-trade		2,422,497	2,796,658
	Trade debts		2,253,968	2,424,470
	Loans and advances		420,692	420,671
	Trade deposits and short term prepayments		147,945	67,577
	Accrued return		159,985	142,881
	Other receivables		1,890,079	1,311,180
	Tax refunds due from the Government		538,812	538,812
	Short term investment		1,040,199	34,956
	Cash and bank balances		23,071,311	27,435,361
			39,341,819	42,955,677
TOTAL ASSETS			121,069,620	108,999,117

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Share capital			3,233,750	3,233,750
Reserves			88,834,985	83,133,072
			92,068,735	86,366,822
NON-CURRENT LIABILITIES
	Long-term deposits		89,594	94,394
	Deferred liabilities		6,756,553	7,300,639
			6,846,147	7,395,033
CURRENT LIABILITIES
	Trade and other payables		16,985,019	13,121,005
	Short term running finance		2,100,000	-
	Unclaimed dividend		59,716	47,945
	Unpaid dividend		89,330	82,960
	Taxation - net		2,920,673	1,985,352
			22,154,738	15,237,262
			29,000,885	22,632,295
TOTAL EQUITY AND LIABILITIES			121,069,620	108,999,117

Unconsolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income
For the 3rd quarter and nine months ended March 31, 2019 (Un-audited)
		Nine Months Ended			Quarter Ended
			March 31,	March 31,		March 31,	March 31,
			2019	2018		2019	2018
			(PKR in '000')

Gross sales			52,314,992	50,626,090		17,429,651	17,774,013
Less:	Sales tax and federal excise duty		14,061,754	14,240,681		4,577,359	5,090,856
	Rebates and commission		732,154	714,820		286,283	266,396
			14,793,908	14,955,501		4,863,642	5,357,252
Net sales			37,521,084	35,670,589		12,566,009	12,416,761

Cost of sales			(26,261,232)	(22,578,034)		(8,730,172)	(8,209,947)
Gross profit			11,259,852	13,092,555		3,835,837	4,206,814

Distribution cost			(2,101,175)	(1,348,647)		(726,666)	(535,464)
Administrative expenses			(881,688)	(813,960)		(322,043)	(257,457)
Other expenses			(875,770)	(985,349)		(305,168)	(368,600)
Other income			2,349,194	2,034,900		742,623	839,562
Profit before taxation			9,750,413	11,979,499		3,224,583	3,884,855
Taxation
	-current		(2,203,674)	(2,170,216)		(770,084)	(683,533)
	-deferred		747,199	(7,597)		338,650	53,231
			(1,456,475)	(2,177,813)		(431,434)	(630,302)
Profit after taxation			8,293,938	9,801,686		2,793,149	3,254,553

Other comprehensive income:
Other comprehensive loss which will not be reclassified to statement of
profit or loss in subsequent periods

	Unrealized loss on remeasurement of equity investment at fairvalue through other comprehensive income		(5,912)	407		5,026	6,212
			(5,912)	407		5,026	6,212
	Deferred tax thereon		887	(61)		(753)	(932)
			(5,025)	346		4,273	5,280
Total comprehensive income for the period			8,288,913	9,802,032		2,797,422	3,259,833

	(PKR)		(PKR)
Earnings per share - basic and diluted	25.65	30.31	8.64	10.06

Condensed Interim Consolidated Statement of Financial Position
	As at March 31, 2019

			(Un-audited)	(Audited)
			March 31,	June 30,
			2019	2018
			(PKR in '000')
	ASSETS
	NON-CURRENT ASSETS
		Fixed assets
		Property, plant and equipment	108,618,457	73,865,002
		Intangible assets	7,697,697	7,943,988
			116,316,154	81,808,990
		Long-term investments	15,897,024	13,642,987
		Long-term loans and advances	624,376	534,786
		Long-term deposits and prepayments	50,696	53,325
			132,888,250	96,040,088
	CURRENT ASSETS
		Stores, spares and consumables	8,523,012	8,854,536
		Stock-in-trade	12,741,816	12,088,621
		Trade debts	4,726,343	5,142,591
		Loans and advances	1,799,055	1,117,485
		Trade deposits and short-term prepayments	2,444,657	1,108,185
		Other receivables	5,514,349	3,431,926
		Tax refunds due from the Government	538,812	538,812
		Taxation receivable	2,258,962	2,221,851
		Accrued return	170,570	161,742
		Short term investments	1,040,199	34,956
		Cash and bank balances	27,363,958	34,382,272
			67,121,733	69,082,977
	TOTAL ASSETS		200,009,983	165,123,065

	EQUITY AND LIABILITIES
	SHARE CAPITAL AND RESERVES
	Share capital		3,233,750	3,233,750
	Reserves		102,313,161	93,913,157
		Attributable to the owners of the Holding Company	105,546,911	97,146,907
		Non-controlling interests	15,665,378	12,428,264
		Total equity	121,212,289	109,575,171

	NON-CURRENT LIABILITIES

		Long-term finances	21,682,923	8,789,887
		Long-term deposits	89,594	94,394
		Deferred liabilities	9,777,858	10,640,736
		Other long term liabilities	4,466,555	3,431,948
			36,016,930	22,956,965
	CURRENT LIABILITIES
		Trade and other payables	27,796,084	20,242,935
		Unclaimed dividend	154,452	47,945
		Unpaid dividend	89,330	82,960
		Provision for taxation	3,297,314	1,992,278
		Accrued return	407,412	272,146
		Short-term borrowings and running finance	8,097,001	7,332,327
		Current portion of liabilities against assets subject to finance lease	89	822
		Current portion of long-term finances	2,939,082	2,619,516
			42,780,764	32,590,929
			78,797,694	55,547,894

	TOTAL EQUITY AND LIABILITIES		200,009,983	165,123,065

Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the 3rd quarter and nine months ended March 31, 2019 (Un-audited)



		Nine Months Ended			Quarter Ended
		March 31, 2019	March 31, 2018	March 31, 2019		March 31, 2018
		March 31, 2019	March 31, 2018	March 31, 2019		March 31, 2018
		(PKR in '000')			(PKR in '000')


Revenue		103,320,389	92,601,630	35,466,328		32,835,542

Less:	Sales tax and excise duty	16,764,874	16,469,999	5,463,025		5,915,584
	Rebates and commission	4,489,902	3,784,476	1,657,541		1,327,170
		21,254,776	20,254,475	7,120,566		7,242,754
		82,065,613	72,347,155	28,345,762		25,592,788

Cost of sales		(63,799,985)	(52,539,849)	(21,779,033)		(18,952,235)
Gross profit		18,265,628	19,807,306	6,566,729		6,640,553

Distribution cost		(4,296,137)	(3,333,525)	1,458,307)		(1,181,237)
Administrative expenses		(2,308,421)	(2,070,348)	(776,794)		(628,271)
Finance cost		(1,151,277)	(534,989)	(376,944)		(220,394)
Other expenses		(1,313,476)	(1,760,266)	(411,496)		(649,076)
Other income		3,061,838	3,502,495	1,138,122		1,305,814
Profit before taxation		12,258,155	15,610,673	4,681,310		5,267,389

Taxation
	- current	(3,332,147)	(2,423,620)	(1,209,033)		(507,111)
	- deferred	1,071,569	(119,736)	388,038		(269,840)
		(2,260,578)	(2,543,356)	(820,995)		(776,951)
Profit after taxation		9,997,577	13,067,317	3,860,315		4,490,438

Attributable to:
Owners of the Holding Company		9,260,243	11,935,141	3,464,738		4,020,905
Non-controlling interests		737,334	1,132,176	395,577		469,533
		9,997,577	13,067,317	3,860,315		4,490,438

Other comprehensive income for the period

Other comprehensive income which may be reclassified to statement of profit or loss in subsequent periods

Foreign exchange differences on translation of foreign operations		1,339,539	704,626	138,983		341,548

Other comprehensive loss which will not be reclassified to statement of profit or loss in subsequent periods
Unrealized loss on remeasurement of equity investment atfair value through othercomprehensive income		(5,912)	407	5,026		6,212
	Deferred tax thereon	887	(61)	(753)		(932)
		(5,025)	346	4,273		5,280

Total comprehensive income for the period		11,332,091	13,772,289	4,003,571		4,837,266

Attributable to:
Owners of the Holding Company		10,594,757	12,640,113	3,607,994		4,367,733
Non-controlling interests		737,334	1,132,176	395,577		469,533

		11,332,091	13,772,289	4,003,571		4,837,266

		(PKR)			(PKR)

Earnings per share - basic and diluted		28.64	36.91	10.71		12.43

Directors' Report (Condensed)

The Directors have the pleasure in presenting to you the unaudited financial results of your Company which include both, stand-alone and consolidated financial statements for the nine months ended March 31, 2019.

Overview

The export performance of the Cement Industry has been exceptional during the the current financial year. The drop in local sales reduced the overall Industry volumes by 0.5% to 34.58 million tons for the nine months ended March 31, 2019 in comparison to 34.76 million tons during the same period last year. Export sales volume registered an increase of 49.0% to reach 5.13 million tons as compared to 3.44 million tons during the nine months of the current financial year and the local sales volume registered a decline of 6.0% to 29.45 million tons during the nine months ended March 31, 2019 in comparison to 31.31 million tons during the same period last year.

In comparison to the Cement Industry, your Company's overall sales grew by 1.9% to reach 5.95 million tons during the nine months of the current financial year. The local cement sales volume registered a decline of 12.2% and was 4.42 million tons in comparison to 5.04 million tons last year and the export sales volumes of the Company improved by 105.5% to 1.53 million tons as compared to 0.74 million tons during the same period last year.

On a consolidated basis, your Company achieved a gross turnover of PKR 103.32 billion which is 11.6% higher as compared to the same period last year's turnover of PKR 92.60 billion.

Moreover, consolidated Net Profit of the Company was PKR 10.00 billion of which PKR 0.74 billion is attributable to non-controlling interests which translates into an EPS of PKR 28.64 during the nine months ended March 31, 2019 as compared to PKR36.91 during the same period last year.

Business Performance

a. Production & Sales Volume Performance - Standalone

The standalone production and sales statistics of your Company for the current nine months ended March 31, 2019 compared to the same period last year are as follows:




Clinker Production	5,448	5,354	1.8%
Cement Production	5,183	5,785	(10.4%)
Cement Sales	5,183	5,784	(10.4%)
Clinker Sales	771	59	1,206.8%

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

A comparison of the dispatches of the Industry and your Company's standalone business for the nine months of the current financial year 2018-19 in comparison with the same period last year is presented below:




Cement Industry

Local Sales	29,448	31,314	(1,866)	(6.0%)

Export Sales
- Bagged	3,353	3,300	53	1.6%
- Loose	95	144	(49)	(34.0%)
- Clinker	1,684	-	1,684	100.0%
Total Exports	5,132	3,444	1,688	49.0%
Grand Total	34,580	34,758	(178)	(0.5%)

Lucky Cement

Local Sales
- Cement	4,423	5,039	(616)	(12.2%)
- Clinker	-	59	(59)	(100.0%)
Total Local Sales	4,423	5,098	(675)	(13.2%)

Export Sales
- Bagged	665	601	64	10.6%
- Loose	95	144	(49)	(34.0%)
- Clinker	771	-	771	100.0%
Total Exports	1,531	745	786	105.5%
Grand Total	5,954	5,843	111	1.9%


Local Sales	15.0%	16.3%	(8.0%)
Export Sales
- Bagged	19.8%	18.2%	8.8%
- Loose	100.0%	100.0%	0.0%
- Clinker	45.8%	-	100.0%
Total Export	29.8%	21.6%	38.0%
Grand Total	17.2%	16.8%	2.4%

b. Financial Performance - Standalone

The standalone financial performance of your Company for the nine months ended March 31, 2019 as compared to the same period last year is presented below:


Gross Revenue	52,315	50,626	3.3%
Net Revenue	37,521	35,671	5.2%
GP	11,260	13,093	(14.0%)
OP	8,277	10,930	(24.3%)
EBITDA	10,761	13,122	(18.0%)
NP	8,294	9,802	(15.4%)
EPS	25.65 /Share	30.31 /Share	(15.4%)

Revenue

During the nine months ended of the current financial year under review, your Company achieved an overall gross sales revenue growth of 3.3% as compared to the same period last year. This was mainly attributable to higher export sales volumes for clinker.

Cost of Sales

During the nine months ended under review, per ton cost of sales of your Company increased by 14.1% as compared to the same period last year. This increase was mainly on account of increase in coal, packing material and other fuel prices.

Distribution of Gross Revenue

Distribution of Cost of Sales

Gross Profit

Your Company achieved a gross profit margin of 30.0% for the nine months under review as compared to 36.7% reported during the same period last year.

Net Profit

Your Company achieved a profit before tax of PKR 9,750.4 million during the nine months under review as compared to PKR 11,979.5 million reported during the same period last year. Similarly, after tax profit of PKR 8,293.9 million was achieved during the nine months under review as compared to PKR 9,801.7 million reported during the same period last year.

Earnings per share

The earnings per share of your Company for the nine months ended March 31, 2019 was PKR 25.65 in comparison to PKR 30.31 reported during the same period last year.

Projects - New and Ongoing

Brownfield cement plant expansion in KPK Province of Pakistan - 2.6 million tons per annum

The civil work at project site is progressing as per target timelines and with the arrival of plant & machinery shipments, erection and fabrication work is also progressing as planned to achieve commercial operations in the second quarter of the financial year 2019-20.

Investments

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

The construction activity for setting up 660 MW super critical, lignite coal-based power plant is progressing as per project implementation schedule. Target to achieve commercial operations is 1st March 2021.

Investment in automotive manufacturing plant - Kia Lucky Motors Pakistan Limited [KLM]

The manufacturing facility is complete and ready to start production. KLM has decided to start booking of locally produced 2000 CC SUV "SPORTAGE" from June 2019 and 1000 CC small size hatchback "PICANTO" from August 2019. The sales launch of the SPORTAGE is scheduled towards end of July / early August 2019 and that of PICANTO in the month of October 2019.

Greenfield clinker production facility in Samawah, Iraq - 1.2 million tons per annum

The contracts for civil design and civil works have been finalised. The contract for Power Plant has also been finalized with Wartsila and letter of credit will be established by the end of April 2019. Levelling work at project site is in progress. Target to achieve commercial production is for the first quarter of financial year 2020-21.

Corporate Social Responsibility

For the past 25 years, your Company has remained fully committed towards improvement in the society and the communities in which it operates. The primary focus of CSR initiatives is in the sectors of Education, Women empowerment, Community development, Health and Environment conservation.

Education / Scholarships

Continuing with its longer-term vision to support the deserving and less privileged segments of the society, your Company continued to extend a number of scholarships to various students of IBA, IoBM, and other leading universities in Pakistan and abroad.

Women Empowerment

Your Company continues to prioritize its commitment towards women's education and continues to work in collaboration with Zindagi Trust, to support the two leading Government girls' schools in Karachi. These schools have been transformed into model girls' educational institutions in Pakistan.

Health Initiatives

The quality healthcare has always remained your Company's priority, especially through the financial support to Aziz Tabba Foundation: a prominent philanthropic institution that is running Tabba Heart and Tabba Kidney institutes, which provide vital support in bridging the gap of specialized and modern medical care in the Country. In the current financial year, your Company also provided financial support to Shaukat Khanum Memorial Cancer Hospital and Pakistan Welfare Association of the Blind.

Environment Conservation

Your Company always takes serious responsibility towards the conservation of Environment and takes it into account in every sphere of its operations. With an effort to further highlight the importance of environment preservation, your company continued with its tree plantation drive in and around its manufacturing sites.

Outlook

With the prevailing economic uncertainties and macro-economic situation, your Company believes that in short to medium-term, the outlook of the Cement industry will be challenging for the domestic sales. However, export sales are anticipated to remain strong in view of favorable market dynamics and increasing demand for Clinker in the regional countries.

In the long-term, Cement industry's outlook remains promising on account of Government's key initiatives to build both small and mega-capacity / multipurpose water reservoirs / dams and construction of low-cost affordable houses for public at large.

Your Company's robust financial position and free cash flow generating ability shall support its Vision to improve operational efficiencies as well as make investments in new projects, which can bring in further improvement in efficiencies and enhance shareholders' value.

Acknowledgement

Directors of your Company take pleasure in expressing their sincere gratitude and appreciation for outstanding commitment and contribution of all the employees and continued trust and reliance placed in the Company by all the stakeholders.

On behalf of the Board

MUHAMMAD YUNUS TABBA MUHAMMAD ALI TABBA

Chairman / Director Chief Executive / Director

Karachi: April 26, 2019

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

END

QRTLLFLFSDIDFIA

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