Last checked at 24 Apr 2017 12:52
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:
|
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