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Final Results

31st Jul 2017 14:37

RNS Number : 6046M

Lucky Cement Limited

31 July 2017

LCK/CS/FR2017/2017-18/ July 31, 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 year ended June 30, 2017

We have to inform you that the Board of Directors of our Company in their Meeting held on Monday, July 31, 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 120%

(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 condensed directors' report are attached.

The 24th Annual General Meeting (AGM) of the Company will be held on Monday, September 25, 2017 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, September 11, 2017 to Monday, September 25, 2017 (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, September 9, 2017 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

IRFAN CHAWALA

Director Finance / CFO

UNCONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2017
		2017	2016
		Rupees '000
ASSETS
NON-CURRENT ASSETS
Fixed assets
	Property, plant and equipment	37,488,137	33,887,375
	Intangible assets	79,657	126,549
		37,567,794	34,013,924

	Long-term investments	13,313,520	12,422,020
	Long-term loans and advances	84,951	75,570
	Long-term deposits	3,175	3,175
		50,969,440	46,514,689
CURRENT ASSETS
	Stores and spares	5,894,079	5,993,969
	Stock-in-trade	2,509,273	1,588,469
	Trade debts	1,582,689	2,181,788
	Loans and advances	619,161	447,049
	Trade deposits and short-term prepayments	39,774	38,948
	Accrued return	165,289	125,984
	Other receivables	1,235,019	1,274,026
	Tax refunds due from the Government	538,812	538,812
	Short term investments	45,452	400,000
	Cash and bank balances	33,738,377	26,805,582
		46,367,925	39,394,627

TOTAL ASSETS		97,337,365	85,909,316

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
	Share capital	3,233,750	3,233,750
	Reserves	76,551,231	66,089,088
		79,784,981	69,322,838
NON-CURRENT LIABILITIES

	Long-term deposits	84,630	70,666
	Deferred liabilities	7,124,127	6,898,078
		7,208,757	6,968,744
CURRENT LIABILITIES
	Trade and other payables	9,269,882	8,550,760
	Taxation - net	1,073,745	1,066,974
		10,343,627	9,617,734
		17,552,384	16,586,478

TOTAL EQUITY AND LIABILITIES		97,337,365	85,909,316


UNCONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2017

		2017	2016
		Rupees '000

Gross sales		61,601,934	55,923,115

Less:	Sales tax and federal excise duty	15,227,058	10,086,623
	Rebates and commission	687,833	701,455
		15,914,891	10,788,078

Net sales		45,687,043	45,135,037

Cost of sales		(24,388,760)	(23,389,268)

Gross profit		21,298,283	21,745,769

Distribution cost		(1,703,785)	(2,018,376)
Administrative expenses		(1,021,694)	(1,107,527)
Other expenses		(1,788,023)	(1,640,105)
Other income		1,993,472	1,420,461

Profit before taxation		18,778,253	18,400,222

Taxation
- current		(5,032,196)	(5,015,844)
- deferred		(53,808)	(440,193)
		(5,086,004)	(5,456,037)

Profit after taxation		13,692,249	12,944,185

Other comprehensive income:

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

	Gain on remeasurements of post retirement
	benefit obligation
	benefit obligation	9,488	40,508
	Deferred tax thereon	(2,354)	(10,250)
		7,134	30,258
Other comprehensive income / (loss) which may be reclassified to
profit and loss account in subsequent periods

	Unrealized loss on remeasurement of availabe for sale investment	(4,106)	-
	Deferred tax thereon	616	-
		(3,490)	-
		3,644	30,258

Total comprehensive income for the year		13,695,893	12,974,443

		(Rupees)

Earnings per share - basic and diluted		42.34	40.03

CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2017
		2017	2016
		(Rupees in '000)
ASSETS
NON-CURRENT ASSETS
	Fixed assets
	Property, plant and equipment	59,601,233	52,357,646
	Intangible assets	7,388,387	7,022,261
		66,989,620	59,379,907

	Long-term investments	11,098,870	10,654,528
	Long-term loans and advances	467,373	433,207
	Long-term deposits and prepayments	44,972	39,939
		78,600,835	70,507,581
CURRENT ASSETS
	Stores, spares and consumables	7,041,171	7,016,458
	Stock-in-trade	8,423,173	6,905,826
	Trade debts	4,172,567	3,821,855
	Loans and advances	1,061,146	852,484
	Trade deposits and short-term prepayments	675,814	472,379
	Other receivables	2,881,844	2,098,339
	Tax refunds due from the Government	538,812	538,812
	Taxation - receivable	1,093,972	2,219,273
	Accrued return	181,355	126,286
	Short term investments	45,452	400,000
	Cash and bank balances	36,273,319	28,448,471
		62,388,625	52,900,183

TOTAL ASSETS		140,989,460	123,407,764

EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES


	Share capital	3,233,750	3,233,750
	Reserves	83,736,475	70,337,188

	Attributable to the owners of the Holding Company	86,970,225	73,570,938
	Non-controlling interests	9,235,325	7,888,373
	Total equity	96,205,550	81,459,311


NON-CURRENT LIABILITIES

	Long-term finance	8,825,140	8,741,955
	Long-term deposits	84,630	70,666
	Liabilities against assets subject to finance lease	798	-
	Deferred liabilities	9,864,932	9,916,313
	Other long term liabilities	2,752,510	2,541,166
		21,528,010	21,270,100
CURRENT LIABILITIES
	Trade and other payables	19,225,920	15,978,691
	Provision for Taxation	1,073,745	1,066,974
	Accrued return	177,654	146,321
	Short-term borrowings and running finance	2,128,905	1,937,184
	Current portion of liabilities against assets subject to finance lease	2,009	-
	Current portion of long-term finance	647,667	1,549,183
		23,255,900	20,678,353
		44,783,910	41,948,453

TOTAL EQUITY AND LIABILITIES		140,989,460	123,407,764

CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2017
		2017	2016
		(Rupees in '000)


Turnover		109,800,227	98,651,896

Less:	Sales tax and excise duty	17,959,806	13,098,661
	Rebates and commission	4,457,896	3,490,485
		22,417,702	16,589,146

		87,382,525	82,062,750

Cost of turnover		(58,445,580)	(54,214,956)

Gross profit		28,936,945	27,847,794

Distribution cost		(4,138,496)	(3,898,109)
Administrative expenses		(2,237,067)	(2,089,619)
Finance cost		(682,173)	(762,222)
Other expenses		(1,899,264)	(1,926,061)
Other income		2,068,157	1,478,074

		22,048,102	20,649,857

Share of profit in equity-accounted investments		1,582,119	1,179,966

Profit before taxation		23,630,221	21,829,823

Taxation
	current	(6,475,246)	(5,484,877)
	deferred	235,659	(353,917)
Taxation		(6,239,587)	(5,838,794)

Profit after taxation		17,390,634	15,991,029

Attributable to:
	Owners of the Holding Company	16,227,033	14,872,560
	Non-controlling interests	1,163,601	1,118,469

		17,390,634	15,991,029

Other comprehensive income:

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

Gain / (loss) on remeasurements of post retirement benefit obligations		(64,663)	22,478
Deferred tax thereon		15,873	(6,180)
		(48,790)	16,298

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

Foreign exchange differences on translation of foreign operations		1,385	148,867

Unrealised loss on remeasurement of available-for-sale investment		(4,106)	-
Deferred tax thereon		616	-
		(3,490)	-

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
		(50,895)	165,165

Total comprehensive income for the year		17,339,739	16,156,194

Attributable to:
Owners of the Holding Company		16,200,957	15,043,863
Non-controlling interests		1,138,782	1,112,331

		17,339,739	16,156,194

		(Rupees)

Earnings per share - basic and diluted		50.18	45.99

Directors' Report (Condensed

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 audited financial statements for the fiscal year ended June 30, 2017.

Overview

Cement industry in Pakistan grew by 3.7% to 40.32 million tons during the fiscal year ended June 30, 2017 compared to 38.87 million tons last year. While local sales volume registered a growth of 8.0% to 35.65 million tons during the fiscal year compared to 33.00 million tons last year; export sales volume registered a decline of 20.6% to 4.66 million tons during the year under review compared to 5.87 million tons last year.

Your Company achieved an overall growth of 3.1% with total sales volume of 7.15 million tons during the fiscal year 2016-17 compared to 6.93 million tons last year. While local sales volume of your Company registered a growth of 13.9% to 6.07 million tons during the current fiscal year compared to 5.33 million tons last year; export sales volume declined by 32.7% to 1.08 million tons during the fiscal year 2016-17 compared to 1.61 million tons last year.

The EPS for the fiscal year ended June 30, 2017 was recorded at PKR 42.34 which is 5.8% higher than last year's EPS of PKR 40.03.

Business Performance

a. Production & Sales Volume Performance

The production and sales statistics of your Company for the fiscal year 2016-17 compared to last year are as follows:




Clinker Production	6,873	6,608	4.0%
Cement Production	6,881	6,908	(0.4%)
Cement Sales	6,853	6,934	(1.2%)
Clinker Sales	297	-	100.0%

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 2016-17 with last year is presented below:




Cement Industry
Local Sales	35,652	33,000	2,652	8.0%
Export Sales
- Bagged	4,479	5,728	(1,249)	(21.8%)
- Loose	185	145	40	27.6%
Total Exports	4,664	5,873	(1,209)	(20.6%)
Grand Total	40,316	38,873	1,443	3.7%
Lucky Cement
Local Sales
- Cement	5,772	5,327	445	8.4%
- Clinker	297	-	297	100.0%
Total Local Sales	6,069	5,327	742	13.9%
Export Sales
- Bagged	896	1,462	(566)	(38.7%)
- Loose	185	145	40	27.6%
Total Exports	1,081	1,607	(526)	(32.7%)
Grand Total	7,150	6,934	216	3.1%


Local Sales	17.0%	16.1%	5.6%
Export Sales
- Bagged	20.0%	25.5%	(21.6%)
- Loose	100.0%	100.0%	-
Total Export	23.2%	27.4%	(15.3%)
Grand Total	17.7%	17.8%	(0.6%)

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

a. Financial Performance

The financial performance of your Company for fiscal year 2016-17 compared to last year is presented below:


Gross Revenue	61,602	55,923	10.2%
Net Revenue	45,687	45,135	1.2%
GP	21,298	21,746	(2.1%)
OP	18,573	18,620	(0.3%)
EBITDA	21,205	21,189	0.1%
NP	13,692	12,944	5.8%
EPS	42.34 / Share	40.03 / Share	5.8%

Revenue During the fiscal year under review, your Company achieved an overall net sales revenue growth of 1.2% compared to last year. This was mainly attributable to increase in sales volumes.	Cost of Sales During the fiscal year under review, per ton cost of sales of your Company increased by 1.0% compared to last year. The increase was mainly attributable to increase in coal prices.
Distribution of Gross Revenue		Distribution of Cost of Sales

Gross Profit Your Company achieved gross profit margin of 46.6% for the year under review compared to 48.2% reported last year.
Net Profit Your Company achieved profit before tax of PKR 18,778 million during the year under review compared to PKR 18,400 million reported last year. Similarly, after tax profit of PKR 13,692 million was achieved during the year under review compared to PKR 12,944 million reported last year.
Earnings per share The earnings per share of your Company for the year ended June 30, 2017 was PKR 42.34 compared to PKR 40.03 reported 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 in 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.

Investments

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

Your company has already executed EPC contract and also finalized draft of the Power Purchase Agreement and Implementation Agreement and also received intimation for coal allocation from Sindh Engro Coal Mining Company (SECMC); however, the implementation is delayed due to limits being imposed by the power purchaser for the use of imported coal beyond a restrictive timeline, even in the contingent event of non-availability of local (Thar) coal by that time. The target to achieve financial close is December 2017 and start of commercial operations by December 2020.

The consolidated audited financial statements of the Company for the year ended June 30, 2017, include the net assets of the above project company i.e. Lucky Electric Power Company Limited which is 100% indirectly owned subsidiary of the Company.

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

KLM was awarded category 'A' greenfield investment status in June 2017 by the Ministry of Industries and Production and was the first company to get such status under Automotive Development Policy 2016 - 2021. The target to start plant construction is for second quarter of the financial year 2017-18.

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

Capacity expansion of the first 50% [i.e. 0.4355 million tons] in Iraq grinding unit is expected to come online by October 2017, whereas, the remaining 50% of the capacity expansion [i.e. 0.4355 million tons] is expected to come online by the end of November 2017.

Corporate Social Responsibility

Your Company remains committed towards value-creation for the society in which it operates. Therefore, as practiced in the past, your Company continued its services in the education sector by offering scholarships to deserving students in leading universities of the country. Your Company remains fully committed for the cause of women empowerment in the country and continued its support for the two leading Government girls' schools in Karachi in collaboration with Zindagi Trust. With the primary focus of social intervention in the development of women education in the Country, your Company hopes that its support for these schools can transform them into model educational institutions for the girls of Pakistan. On the other hand, support for The Hub School's maintenance by your Company continued during the current year, as well.

During the holy month of Ramadan, your Company show-cased the true spirit of charity by providing for basic food needs for many deserving families. Furthermore, your Company generously contributed towards various causes to support Eid related festivities. Your Company also continues to donate towards the cause of community development by supporting CPLC - an institution responsible for the safety and security of citizens in Sindh.

Outlook

Your Company continues to remain optimistic about domestic sales volumetric growth for the upcoming financial year. Domestic sales are expected to remain strong 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.

Dividend & Appropriation

Taking into account the current capital and equity investment plans; the board has proposed the final dividend of PKR 12/- per share for the financial year ended June 30, 2017.

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:

		PKR in '000
	Net Profit for the Year
	Un-appropriated profit at the beginning of the year	-
	Profit available for appropriation	13,695,893
		13,695,893
	Appropriations
	Proposed dividend for the Financial Year 2016-17 @ PKR 12/-	(3,880,500)
	Proposed transfer to General Reserves	(9,815,393)
	Un-appropriated profit at the end of the year	-
	Basic and diluted earnings per share - PKR	42.34

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: July 31, 2017

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

http://www.rns-pdf.londonstockexchange.com/rns/6046M_1-2017-7-31.pdf

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR WGUWUMUPMGPG

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