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Annual Financial Report

1st Sep 2016 14:22

RNS Number : 7266I

Lucky Cement Limited

01 September 2016

LCK/CS/FR2016/2016-17/ 1st September 2016

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 Result for the year ended 30th June 2016

We have to inform you that the Board of Directors of our Company in their Meeting held on Thursday, 1st September 2016 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 100%

(ii) Bonus Shares Nil

(iii) Right Shares Nil

(iv) Any other Entitlement / Corporate Action Nil

(v) Any other Price-Sensitive information Nil

The financial results of the Company consisting of balance sheet, profit and loss account and directors' report are attached.

The 23rd Annual General Meeting (AGM) of the Company will be held on Saturday 29th October 2016 at 10:30 a.m., at the registered office of the Company situated at factory premises Pezu, District Lakki Marwat, Khyber Pukhtunkhwa.

The Share Transfer Books of the Company will remain closed from Monday, 17th October to Saturday 29th October 2016 (both days inclusive). Transfers received at our Share Registrar/Transfer Agent M/s. Central Depository Company of Pakistan Limited, CDC House, 99-B, Block 'B', S.M.C.H.S. Main Shahrah-e-Faisal, Karachi-74400 at the close of business on Saturday 15th October 2016 will be treated in time for the purpose of above entitlement to the transferees.

We will be sending you 200 copies of printed accounts for distribution amongst the Trading Right Entitlement (TRE) Certificate Holders of the Exchange 21 days before the date of AGM.

Yours truly,

For: LUCKY CEMENT LIMITED

MUHAMMAD FAISAL

Executive Director and

Chief Strategy, Finance & Investment Officer

Unconsolidated Balance Sheet
As at 30th June 2016

		2016	2015
		(Rupees in'000')
ASSETS
NON-CURRENT ASSETS
Fixed assets
	Property, plant and equipment	33,887,375	35,018,819
	Intangible assets	126,549	41,921
		34,013,924	35,060,740

	Long-term investments	12,422,020	10,925,020
	Long-term loans and advances	75,570	78,981
	Long-term deposits	3,175	3,175
		46,514,689	46,067,916
CURRENT ASSETS
	Stores and spares	5,993,969	4,995,423
	Stock-in-trade	1,588,469	1,580,745
	Trade debts	2,181,788	2,042,199
	Loans and advances	447,049	253,350
	Trade deposits and short-term prepayments	52,038	50,688
	Accrued mark-up	125,984	79,257
	Other receivables	1,274,026	1,032,853
	Tax refunds due from the Government	538,812	538,812
	Short term investments	400,000	-
	Cash and bank balances	26,805,582	16,444,622
		39,407,717	27,017,949

TOTAL ASSETS		85,922,406	73,085,865

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
	Share capital	3,233,750	3,233,750
	Reserves	66,089,088	56,025,020
		69,322,838	59,258,770
NON-CURRENT LIABILITIES
	Long-term deposits	70,666	69,246
	Deferred liabilities	6,898,078	6,327,146
		6,968,744	6,396,392
CURRENT LIABILITIES
	Trade and other payables	8,563,850	6,382,372
	Taxation - net	1,066,974	1,048,331
		9,630,824	7,430,703


TOTAL EQUITY AND LIABILITIES		85,922,406	73,085,865

Unconsolidated Profit and Loss Account
For the year ended 30th June 2016

		2016	2015
		(Rupees in'000')

Gross sales		55,923,115	53,919,310

Less: Sales tax and federal excise duty		10,086,623	8,487,245
Rebates and commission		614,403	670,758
		10,701,026	9,158,003

Net sales		45,222,089	44,761,307

Cost of sales		(23,421,515)	(24,578,219)

Gross profit		21,800,574	20,183,088

Distribution costs		(2,073,181)	(3,127,018)
Administrative expenses		(1,095,504)	(917,635)
Finance costs		(23,884)	(25,750)
Other expenses		(1,628,244)	(1,442,341)
Other income		1,420,461	1,241,450

Profit before taxation		18,400,222	15,911,794

Taxation
	- current	(5,015,844)	(2,942,130)
	- deferred	(440,193)	(538,066)
		(5,456,037)	(3,480,196)

Profit after taxation		12,944,185	12,431,598

Other comprehensive income :

Other comprehensive income not to be reclassified to
profit and loss account in subsequent periods

Gain/(Loss) on remeasurements of post retirement
benefit obligations		40,508	(71,594)
Deferred taxation		(10,250)	16,958
		30,258	(54,636)
Total comprehensive income for the year		12,974,443	12,376,962

		(Rupees)

Earnings per share - basic and diluted		40.03	38.44

Consolidated Balance Sheet
As at 30th June 2016

		2016	2015
		(Rupees in'000')
ASSETS
NON-CURRENT ASSETS
	Fixed assets
	Property, plant and equipment	52,357,646	49,900,183
	Intangible assets	7,022,261	7,360,811
		59,379,907	57,260,994

	Long-term investments	10,654,528	10,007,198
	Long-term loans and advances	433,207	405,496
	Long-term deposits and prepayments	39,939	33,952
		70,507,581	67,707,640
CURRENT ASSETS
	Stores, spares and consumables	7,016,458	5,921,887
	Stock-in-trade	6,905,826	6,524,154
	Trade debts	3,821,855	3,473,293
	Loans and advances	852,484	578,609
	Trade deposits and short-term prepayments	485,469	464,392
	Accrued mark-up	126,286	79,257
	Other receivables	2,098,339	2,023,466
	Tax refunds due from the Government	538,812	538,812
	Taxation - net	1,152,299	997,518
	Short term investments	400,000	-
	Cash and bank balances	28,448,471	18,155,599
		51,846,299	38,756,987

TOTAL ASSETS		122,353,880	106,464,627

EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES


	Share capital	3,233,750	3,233,750
	Reserves	70,337,188	58,190,818

	Attributable to the owners of the Holding Company	73,570,938	61,424,568
	Non-controlling interests (NCI)	7,888,373	7,071,234
	Total equity	81,459,311	68,495,802

NON-CURRENT LIABILITIES

	Long-term finance	8,741,955	8,854,165
	Long-term deposits	70,666	69,246
	Deferred liabilities	9,916,313	9,430,707
		18,728,934	18,354,118
CURRENT LIABILITIES
	Trade and other payables	18,532,947	15,819,145
	Accrued mark-up	146,321	165,210
	Short-term borrowings and running finance	1,937,184	1,833,247
	Current portion of long-term finance	1,549,183	1,797,105
		22,165,635	19,614,707


TOTAL EQUITY AND LIABILITIES		122,353,880	106,464,627

Consolidated Profit and Loss Account
For the year ended 30th June 2016

		2016	2015

		(Rupees in'000')

Turnover		98,651,896	96,474,922

Less: Sales tax and excise duty		13,098,661	11,209,856
Rebates and commission		3,403,433	3,147,264
		16,502,094	14,357,120

Net sales		82,149,802	82,117,802

Cost of turnover		(54,247,203)	(56,430,360)

Gross profit		27,902,599	25,687,442

Distribution cost		(3,952,914)	(4,653,188)
Administrative expenses		(2,077,596)	(1,984,165)
Finance cost		(789,810)	(1,016,406)
Other expenses		(1,910,496)	(1,667,303)
Other income		1,478,074	1,341,310

		20,649,857	17,707,690

Share of gain in equity-accounted investments		1,179,966	718,039

Profit before taxation		21,829,823	18,425,729

Taxation		(5,838,794)	(3,770,485)

Profit after taxation		15,991,029	14,655,244

Attributable to:
Owners of the Holding Company		14,872,560	13,757,976
Non-controlling interests		1,118,469	897,268

		15,991,029	14,655,244

Other comprehensive income:

Items not to be reclassified to profit and loss account
in subsequent periods :

	Gain on remeasurements of post retirement benefit obligations	22,478	95,850
	Deferred taxation	(6,180)	(32,853)
		16,298	62,997

Items to be reclassified to profit and loss account
in subsequent periods :

	Foreign exchange differences on translation of foreign operations	148,867	65,408

	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 year		16,156,194	14,783,649

Attributable to:
	Owners of the Holding Company	15,043,863	13,834,692
	Non-controlling interests	1,112,331	948,957

		16,156,194	14,783,649

		(Rupees)

Earnings per share - basic and diluted		45.99	42.54

Directors' Report (Condensed)

The Directors of your Company have the pleasure in presenting to you the financial results of your Company which include both, the stand-alone and consolidated audited financial statements for the fiscal year ended 30th June 2016.

Overview

Cement industry in Pakistan grew by 9.8% to 38.87 million tons during the fiscal year ended 30th June, 2016 compared to 35.40 million tons during last year. While local sales volume registered a growth of 17.0% to 33.00 million tons during the fiscal year compared to 28.21 million tons during last year; export sales volume registered a decline of 18.4% to 5.87 million tons during the year under review compared to 7.19 million tons of last year.

Your Company achieved an overall growth of 2.1% to 6.93 million tons during the fiscal year 2015-16 compared to 6.79 million tons sold last year. While local sales volume of your Company registered a growth of 20.5% to 5.33 million tons during the fiscal year 2015-16 compared to 4.42 million tons last year; export sales volume declined by 32.2% to 1.61 million tons during the fiscal year 2015-16 compared to 2.37 million tons of last year.

The Earnings Per Share (EPS) for the fiscal year ended 30th June 2016 was recorded at PKR 40.03 which is 4.1% higher than the last year's EPS of PKR 38.44.

Business Performance

a. Production & Sales Volume Performance

The production and sales statistics of your Company for the fiscal year 2015-16 compared to last year are as follows:



Clinker Production	6,608	6,395	3.3%
Cement Production	6,908	6,795	1.7%
Cement Sales	6,934	6,794	2.1%

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

A comparison of the dispatches of the industry and your Company for the fiscal year ended 2015-16 with last year is presented below:



Cement Industry
Local Sales	33,000	28,206	4,794	17.0%

Export Sales
- Bagged	5,728	6,904	(1,176)	(17.0%)
- Loose	145	291	(146)	(50.1%)
Total Exports	5,873	7,195	(1,322)	(18.4%)

Grand Total	38,873	35,401	3,472	9.8%

Lucky Cement
Local Sales	5,327	4,421	906	20.5%
Export Sales
- Bagged	1,462	2,082	(620)	(29.8%)
- Loose	145	291	(146)	(50.1%)
Total Exports	1,607	2,373	(766)	(32.3%)

Grand Total	6,934	6,794	140	2.1%



Local Sales	16.1%	15.7%	2.5%
Export Sales
- Bagged	25.5%	30.2%	(15.6)%
- Loose	100.0%	100.0%	0.0%
Total Export	27.4%	33.0%	(17.0%)

Grand Total	17.8%	19.2%	(7.3%)

A comparative year-wise analysis of market share of your company is as under:

b. Financial Performance

The financial performance of your Company for fiscal year 2015-16 compared to the last year is presented below:


Revenue	45,222	44,761	1.0%
GP	21,801	20,183	8.0%
OP	18,632	16,138	15.5%
EBITDA	21,201	18,428	15.0%
NP	12,944	12,432	4.1%
EPS	40.03 / Share	38.44 / Share	4.1%

Revenue During the fiscal year under review, your Company achieved an overall net sales revenue growth of 1.0% compared to last year. This was mainly attributable to increase in sales volume.		Cost of Sales Per ton cost of sales of your Company during the fiscal year under review decreased by 6.6% compared to last year. The decrease was mainly attributable to decrease in coal and other fuel prices as well as positive contribution of WHR plants in Pezu and Karachi.
Distribution of Gross Revenue	Distribution of Cost of Sales


Gross Profit Your Company was able to improve its gross profit margin to 48.2% for the year under review compared to 45.1% reported last year.
Net Profit Your Company was able to improve its before tax profitability by 15.6% to PKR 18,400 million during the year under review compared to PKR 15,912 million reported last year. Similarly, after tax profit improved by 4.1% to PKR 12,944 million for the year under review compared to PKR 12,432 million reported last year.
Earnings per share The earnings per share of your Company for the year ended 30th June 2016 was PKR 40.03 compared to PKR 38.44 reported last year.

Projects - New and Ongoing

Brownfield Expansion (Installation of additional Line) at Karachi Plant

Keeping in view the expected growth in cement demand on the back of public and private sector construction projects as well as mega infrastructure development projects primarily driven by China Pakistan Economic Corridor (CPEC) initiative, your Company has decided to increase cement production capacity with the instalation of new cement production line at Karachi Plant of 1.25 million tons per annum at a total project cost of around USD 30 million. This additonal line will become operational by the end of the calendar year 2017.

Fully integrated green field Cement Plant in Punjab Province of Pakistan

Your Company is engaged with the Government of Punjab for acquisition of land for the project. Similarly, it is also in the process of negotiating and finalizing contract with the equipment supplier. Both these activities are likely to be completed by the end of September 2016.

Electricity Supply to PESCO

NEPRA re-determined the tariff in July 2016; however, since the re-determined tariff was not commercially viable; therefore, your Company decided not to pursue this matter any further.

10 MW WHR at PEZU Plant - Kiln

Shipment from the supplier of Project equipment is in progress and the required civil work has already been initiated at the site. The project is expected to be completed by December 2016.

Investments

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

On the advise of the government, the management of your Company is currently engaged with relevant authorities to explore the possibility of using both imported as well as local (Thar) coal as fuel. Use of Thar coal in the power project will require some changes to be made in the design of the equipment which was originally finalized with the EPC contractor(s). The target to finalize the EPC contract with the revised scope is October 2016. This project will be put up on the original site at Port Qasim, Karachi.

The consolidated audited financial statements of the Company for the fiscal year ended 30th June 2016 include the net assets of Lucky Electric Power Company Limited which is a 100% indirectly owned subsidiary of the Company.

Joint Venture Investment in Cement Plant in DR Congo

The construction work at project site is in the final stages to achieve planned Commercial Operations Date (COD) of October 2016.

The effect of 50% share of the net assets of the DR Congo plant has been reflected in the consolidated audited financial statements of the Company for the fiscal year ended 30th June 2016.

Equity Investment in Associated Company in 50 MW Wind Farm

Project construction and installation works have been completed. Testing and commissioning activities of the complex are in final stages. The project is expected to achieve COD by September 2016.

Corporate Social Responsibility

Your Company is fully committed to elevate the livelihood of the society it operates in. Corporate social responsibility is not just a core-value but it also forms an integral part of your Company's business model. Your Company endures its commitment by staying true to its cause in supporting the best avenues of education, health and environment.

In its resolve to provide quality education to the less-privileged class of the society, your Company continued to offer merit based scholarships to the deserving students across the country enrolled with leading institutions throughout the year. Playing its part in promoting literacy amongst the masses, your Company supplemented the book reading habits in children by celebrating 'International Literacy Day' at under-privileged schools in Karachi and Pezu during the year. Your Company also generously donated to various not-for-profit organizations providing education through public schools nationwide. Your Company also provided school books for blind students registered with Pakistan Welfare Association of Blind.

In its efforts to sustain the environment, your Company celebrated Green Office Week on account of World Environment Day (5th June) through awareness building sessions amongst employees, tree plantation drives at Karachi and Pezu Plants, and continuous efforts to reduce the carbon footprint of its business operations.

Sustaining its core value of social development, your Company has devotedly participated in numerous health projects across Pakistan. This includes patronage of Aziz Tabba Foundation, a welfare entity dedicated to raising the standards of health, education, and economic wellbeing of humanity by operating a leading cardiac hospital and a leading kidney center in the country. Your Company is also supporting Karachi Relief Trust in Disaster Management and rehabilitation of IDPs, as well as the Special Olympics Pakistan in organizing healthy athletic activities in the country. In addition, your Company continued its support to numerous social improvement initiatives in the country and provided support to various non-governamental organisations.

Outlook

Your Company is optimistic about its local volumetric growth in the upcoming financial year. Domestic sales are expected to remain strong on the back of public and private 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.

Dividend & Appropriation

Taking into account the current capital and equity investment plans; the board has proposed the final dividend of PKR __/- per share for the financial year ended 30th June 2016.

This approach remains in line with your Company's commitment to consistently provide sustainable returns to the shareholders. Movement in un-appropriated profit is as follows:

	Lucky Cement Limited	PKR in '000
	Net Profit for the Year
	Un-appropriated profit at the beginning of the year	-
	Profit available for appropriation	12,974,443 12,944,185
		12,974,443 12,944,185
	Appropriations
	Proposed dividend for the Financial Year 2015-16 @ PKR 10/-	(3,233,750)
	Proposed transfer to General Reserves	(9,740,693)
	Un-appropriated profit at the end of the year	-
	Basic and diluted earnings per share - PKR	40.03 40.03

Acknowledgement

Your directors take this opportunity to express their deep sense of gratitude to 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 YUNUS TABBA

Chairman / Director

Karachi: 1st September 2016

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSUGUCUBUPQGWG

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