Last checked at 27 Oct 2016 13:27
LCK/CS/2016-17/ October 27, 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 Results for the 1st Quarter ended - September 30, 2016
We have to inform that the Board of Directors of our Company in their Meeting held on Thursday, October 27, 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 Nil
(ii) Bonus Issue Nil
(iii) Right Issue 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 annexed.
Yours truly,
for: LUCKY CEMENT LIMITED
MUHAMMAD FAISAL
Executive Director and
Chief Strategy, Finance & Investment Officer
Unconsolidated Condensed Interim Balance Sheet
As at September 30, 2016
September 30, | September 30, | |
2016 | 2015 | |
(Un-audited) | (Audited) | |
ASSETS | ||
NON-CURRENT ASSETS | ||
Property, plant and equipment | 34,481,222 | 33,887,375 |
Intangible assets | 114,184 | 126,549 |
34,595,406 | 34,013,924 | |
Long-term investments | 12,422,020 | 12,422,020 |
Long-term advances | 125,942 | 75,570 |
Long-term deposits | 3,175 | 3,175 |
47,146,543 | 46,514,689 | |
CURRENT ASSETS | ||
Stores and spares | 6,152,618 | 5,993,969 |
Stock-in-trade | 1,758,587 | 1,588,469 |
Trade debts | 2,006,433 | 2,181,788 |
Loans and advances | 568,935 | 447,049 |
Trade deposits and short term prepayments | 56,884 | 52,038 |
Accrued mark-up on deposit accounts | 139,418 | 125,984 |
Other receivables | 1,258,503 | 1,274,026 |
Tax refunds due from the Government | 538,812 | 538,812 |
Short term investments | - | 400,000 |
Cash and bank balances | 30,810,326 | 26,805,582 |
43,290,516 | 39,407,717 | |
TOTAL ASSETS | 90,437,059 | 85,922,406 |
EQUITY AND LIABILITIES | ||
SHARE CAPITAL AND RESERVES | ||
Authorized capital | 5,000,000 | 5,000,000 |
Issued, subscribed and paid-up capital | 3,233,750 | 3,233,750 |
Reserves | 69,326,248 | 66,089,088 |
72,559,998 | 69,322,838 | |
NON-CURRENT LIABILITIES | ||
Long-term deposits | 68,136 | 70,666 |
Deferred liabilities | 7,054,983 | 6,898,078 |
7,123,119 | 6,968,744 | |
CURRENT LIABILITIES | ||
Trade and other payables | 8,633,746 | 8,563,850 |
Taxation - net | 2,120,196 | 1,066,974 |
10,753,942 | 9,630,824 | |
CONTINGENCIES AND COMMITMENTS | ||
TOTAL EQUITY AND LIABILITIES | 90,437,059 | 85,922,406 |
Unconsolidated Condensed Interim Profit & Loss Account
For the 1st Quarter ended September 30, 2016 (un - audited)
Quarter Ended | ||
September 30, | September 30, | |
2016 | 2015 | |
Gross sales | 14,048,994 | 12,498,877 |
Less: Sales tax and excise duty | 3,336,346 | 2,029,367 |
Rebates and commission | 145,833 | 142,716 |
3,482,179 | 2,172,083 | |
Net sales | 10,566,815 | 10,326,794 |
Cost of sales | (5,216,062) | (5,588,634) |
Gross profit | 5,350,753 | 4,738,160 |
Distribution cost | (490,115) | (576,936) |
Administrative expenses | (244,044) | (263,634) |
Finance costs | (2,963) | (2,898) |
Other charges | (413,863) | (338,855) |
Other income | 451,345 | 358,430 |
Profit before taxation | 4,651,113 | 3,914,267 |
Taxation | ||
-current | (1,308,459) | (931,464) |
-deferred | (105,494) | (14,590) |
(1,413,953) | (946,054) | |
Profit after taxation | 3,237,160 | 2,968,213 |
Other comprehensive income for the period | - | - |
Total comprehensive income for the period | 3,237,160 | 2,968,213 |
PKR | ||
Earnings per share - basic and diluted | 10.01 | 9.18 |
Condensed Interim Consolidated Balance Sheet
As at September 30, 2016
September 30, | September 30, | |
2016 | 2015 | |
(Un-audited) | (Audited) | |
ASSETS | ||
NON-CURRENT ASSETS | ||
Property, plant and equipment | 52,853,892 | 52,357,646 |
Intangible assets | 6,919,292 | 7,022,261 |
59,773,184 | 59,379,907 | |
Long-term investments | 10,756,408 | 10,654,528 |
Long-term loans and advances | 443,672 | 433,207 |
Long-term deposits and prepayments | 43,005 | 39,939 |
71,016,269 | 70,507,581 | |
CURRENT ASSETS | ||
Stores, spares and consumables | 7,197,654 | 7,016,458 |
Stock-in-trade | 7,233,493 | 6,905,826 |
Trade debts | 3,938,519 | 3,821,855 |
Loans and advances | 988,540 | 852,484 |
Trade deposits and short term prepayments | 572,886 | 485,469 |
Accrued mark-up | 139,646 | 126,286 |
Other receivables | 2,119,135 | 2,098,339 |
Tax refunds due from the Government | 538,812 | 538,812 |
Taxation refundable- net | - | 1,152,299 |
Short term investments | - | 400,000 |
Cash and bank balances | 32,366,323 | 28,448,471 |
55,095,008 | 51,846,299 | |
TOTAL ASSETS | 126,111,277 | 122,353,880 |
EQUITY AND LIABILITIES | ||
SHARE CAPITAL AND RESERVES | ||
Issued, subscribed and paid-up capital | 3,233,750 | 3,233,750 |
Reserves | 74,105,807 | 70,337,188 |
Attributable to the equity holders of the Holding Company | 77,339,557 | 73,570,938 |
Non-controlling interests | 8,150,114 | 7,888,373 |
Total equity | 85,489,671 | 81,459,311 |
NON-CURRENT LIABILITIES | ||
Long-term finances | 8,162,720 | 8,741,955 |
Long-term deposits | 68,136 | 70,666 |
Deferred liabilities | 9,977,970 | 9,916,313 |
18,208,826 | 18,728,934 | |
CURRENT LIABILITIES | ||
Short-term borrowings and running finance | 1,624,281 | 1,937,184 |
Trade and other payables | 18,296,779 | 18,532,947 |
Taxation payable- net | 793,202 | - |
Accrued mark-up | 131,294 | 146,321 |
Current portion of long-term finance | 1,567,224 | 1,549,183 |
22,412,780 | 22,165,635 | |
CONTINGENCIES AND COMMITMENTS | ||
TOTAL EQUITY AND LIABILITIES | 126,111,277 | 122,353,880 |
Condensed Interim Consolidated Profit and Loss Account
For the 1st quarter ended September 30, 2016 (un - audited)
Quarter Ended | ||
September 30, | September 30, | |
2016 | 2015 | |
Gross sales | 24,632,034 | 22,329,803 |
Less: Sales tax and excise duty | 3,933,496 | 2,738,581 |
Rebates and commission | 883,124 | 770,244 |
4,816,620 | 3,508,825 | |
Net sales | 19,815,414 | 18,820,978 |
Cost of sales | (12,843,762) | (12,741,302) |
Gross profit | 6,971,652 | 6,079,676 |
Distribution cost | (1,013,091) | (1,019,170) |
Administrative expenses | (505,203) | (495,195) |
Finance costs | (193,243) | (260,051) |
Other expenses | (486,231) | (395,791) |
Other income | 873,916 | 620,558 |
Profit before taxation | 5,647,800 | 4,530,027 |
Taxation | ||
-current | (1,599,510) | (1,090,993) |
-deferred | (6,154) | 43,636 |
(1,605,664) | (1,047,357) | |
Profit after taxation | 4,042,136 | 3,482,670 |
Attributable to: | ||
Owners of the Holding Company | 3,780,395 | 3,297,815 |
Non-controlling interests | 261,741 | 184,855 |
4,042,136 | 3,482,670 | |
Other comprehensive income for the period | ||
Foreign exchange differences on translation of foreign operations | (11,776) | 132,515 |
Items to be reclassified to profit or loss in subsequent periods: | ||
Loss on hedge during the period | - | (3,342) |
Income tax relating to hedging reserve | - | 1,069 |
- | (2,273) | |
Adjustments for amounts transferred to initial carrying amounts of hedged item - capital work-in-progress | - | 386 |
Total comprehensive income for the period | 4,030,360 | 3,613,298 |
Attributable to: | ||
Owners of the Holding Company | 3,768,619 | 3,429,272 |
Non-controlling interests | 261,741
| 184,026 |
4,030,360 | 3,613,298 | |
PKR | ||
Earnings per share - basic and diluted | 11.69 | 10.20 |
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 first quarter ended September 30, 2016.
Overview:
Cement industry in Pakistan grew by 8.3% to 8.97 million tons during the first quarter compared to 8.28 million tons during the same period last year. While local sales volume registered a growth of 9.5% to 7.43 million tons during the fiscal year compared to 6.78 million tons during the same last year; export sales volume registered a growth of 3.0% to 1.54 million tons during the first quarter compared to 1.50 million tons during the same period last year.
Your Company achieved an overall growth of 8.8% to 1.70 million tons during the first quarter compared to 1.56 million tons sold in the same period last year. While local sales volume of your Company registered a growth of 25.4% to 1.34 million tons during the first quarter compared to 1.07 million tons during the same period last year; export sales volume declined by 27.2% to 0.36 million tons during the first quarter compared to 0.49 million tons during the same period last year.
The EPS for the quarter was recorded at PKR 10.01 which is 9.1% higher than the same period last year's EPS of PKR 9.18.
Business Performance
a. Production & Sales Volume Performance
The production and sales statistics of your Company for the first quarter of the financial year 2016-17 compared to the same period last year are as follows:
Clinker Production | 1,642 | 1,560 | 5.3% |
Cement Production | 1,566 | 1,558 | 0.5% |
Cement Sales | 1,558 | 1,565 | (0.4%) |
Clinker Sales | 145 | - | 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 first quarter of the financial year 2016-17 with the same period last year is presented below:
Cement Industry | |||||||
Local Sales | 7,431 | 6,787 | 644 | 9.5% | |||
Export Sales | |||||||
- Bagged | 1,467 | 1,500 | (33) | (2.2%) | |||
- Loose | 78 | - | 78 | 100.0% | |||
Total Exports | 1,545 | 1,500 | 45 | 3.0% | |||
Grand Total | 8,976 | 8,287 | 689 | 8.3% | |||
Lucky Cement | |||||||
Local Sales | |||||||
- Cement | 1,198 | 1,071 | 127 | 11.9% | |||
- Clinker | 145 | - | 145 | 100.0% | |||
Total Local Sales | 1,343 | 1,071 | 272 | 25.4% | |||
Export Sales | |||||||
- Bagged | 282 | 494 | (212) | (42.9%) | |||
- Loose | 78 | - | 78 | 100.0% | |||
Total Exports | 360 | 494 | (134) | (27.2%) | |||
Grand Total | 1,703 | 1,565 | 138 | 8.8% | |||
| |||||||
| |||||||
| |||||||
Local Sales | 18.1% | 15.8% | 14.6% |
| |||
Export Sales |
| ||||||
- Bagged | 19.2% | 32.9% | (41.6%) |
| |||
- Loose | 100.0% | 0.0% | 100.0% |
| |||
Total Export | 23.3% | 32.9% | (29.2%) |
| |||
Grand Total | 18.97% | 18.90% | 0.4% |
| |||
b. Financial Performance
The financial performance of your Company for the first quarter of the financial year 2016-17 compared to the same period last year is presented below:
|
Revenue During the first quarter of 2016-17 under review, your Company achieved an overall net sales revenue growth of 2.3% compared to same period last year. This was mainly attributable to increase in sales volumes. | Cost of Sales Per ton cost of sales of your Company during the period under review decreased by 14.2% compared to same period last year. The decrease was mainly attributable to the decrease in fuel prices and cost efficient fuel mix. | |
Distribution of Gross Revenue | Distribution of Cost of Sale | |
Gross Profit Your Company was able to improve its gross profit margin to 50.6% for the quarter under review compared to 45.8% reported during the same period last year. | ||
Net Profit Your Company achieved profit before tax of PKR 4,651.1 million during the quarter under review compared to PKR 3,914.3 million reported during the same period last year. Similarly, after tax profit of PKR 3,237.2 million was achieved during the quarter under review compared to PKR 2,968.2 million reported during the same period last year. |
| |
Earnings per share The earnings per share of your Company for the first quarter ended September 30, 2016 was PKR 10.01 compared to PKR 9.18 reported during the same period last year.
| ||
Projects - New and Ongoing
Brownfield Expansion (Installation of additional Line) at Karachi Plant
Progress on the Project is as per plan and the company expects the new line to be operational by the end of the calendar year 2017.
Fully integrated green field Cement Plant in Punjab Province of Pakistan
Your Company is in the process of seeking approvals and necessary authorizations from the Government of Punjab for commencement of this 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 November 2016.
10 MW WHR at PEZU Plant - Kiln
Shipment from the supplier of Project equipment is completed and required civil work is in progress. The project is expected to be completed by December 2016.
Investments
Investment in 1 x 660 MW, supercritical, coal based power project
On the advice of the government, the management of your Company has agreed to change its primary fuel from Imported Coal to Local Coal (Thar) whereas plant will be located at the original site of Port Qasim, Karachi. Accordingly, Private Power and Infrastructure Board (PPIB) has approved amendments to the Letter of Support originally issued to Lucky Electric Power Company Limited (LEPCL) whereas National Electric Power Regulatory Authority has admitted the revised upfront tariff petition of the Company on Local Coal. The Company is currently in the process of finalizing the required changes to the EPC contract and is also in discussion with Sind Engro Coal Mining Company (SECMC) for a reliable long term Coal Supply Agreement. The target to achieve financial close is March 2017.
The consolidated unaudited financial statements of the Company for the quarter ended September 30, 2016, include the net assets of LEPCL 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 15th November, 2016.
The effect of 50% share of the net assets of the DR Congo plant has been reflected in the consolidated unaudited financial statements of the Company for the quarter ended September 30, 2016.
Corporate Social Responsibility
Your Company has undertaken the responsibility of strengthening and refining its corporate social responsibility initiatives in various fields including education, health and environment.
To provide a brighter future for the under-privileged section in our society, your Company has joined hands with various prestigious educational institutions in the country to offer educational scholarships to students on merit basis. Furthermore, your company also supported the Hub School project for the smooth running of their operations.
Your company also donated towards the cause of community development by supporting the CPLC, an institution responsible for the safety and security of citizens in Sindh.
Under the domain of offering affordable and quality healthcare to those in need, your Company continued its support to Aziz Tabba Foundation, one of the most prominent philanthropic institutions in Pakistan which runs the affairs of a leading cardiac hospital and a leading kidney centre in the country.
Outlook
Your Company remains optimistic about domestic sales volumetric growth in the current financial year. Domestic sales are anticipated to maintain the same upward momentum during the entire year as witnessed in the first quarter of the current financial year 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.
Click on, or paste the following link into your web browser, to view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/6401N_1-2016-10-27.pdf
On behalf of the Board
MUHAMMAD YUNUS TABBA
Chairman/Director
Karachi: October 27, 2016