Lucky Cem. S Regulatory News (LKCS)

LCK/CS/FR2019/2019-20/ July 27, 2019

Dear Sir(s)

Financial Results for the year ended June 30, 2019

We have to inform you that the Board of Directors of our Company in their Meeting held on Saturday, July 27, 2019 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 65%

(ii) Bonus Shares Nil

(iii) Right Shares Nil

(iv) Any other Entitlement / Corporate Action Nil

(v) Any other Price-Sensitive Information Nil

Contd...P/2

The financial results of the Company consisting of Statements of Financial Position, Statements of Profit and Loss and Other Comprehensive Income and Directors' Report (Condensed) are annexed.

The 26th Annual General Meeting (AGM) of the Company will be held on Friday, September 27, 2019 at 11:30 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 Friday, September 13, 2019 to Friday, September 27, 2019 (both days inclusive). Transfers received at our Share Registrar M/s. CDC Share Registrar Services Limited, CDC House, 99-B, Block 'B', S.M.C.H.S. Main Shahrah-e-Faisal, Karachi-74400 at the close of business on Thursday, September 12, 2019 will be treated in time for the purpose of above entitlement to the transferees.

We will be transmitting in electronic form of our Annual Report, 2019 according to Clause 5.6.4 of PSX Regulations as per your recently issued notice having # PSX/N-4207 dated July 13, 2018.

Yours truly,

For: LUCKY CEMENT LIMITED

IRFAN CHAWALA

Director Finance / CFO

The Directors have the pleasure in presenting to you the audited financial results of your Company which include both, stand-alone and consolidated financial statements for the fiscal year ended June 30, 2019.

The export performance of the Cement Industry has been exceptional during the the current financial year, which supported the overall Industry volumes to increase by 1.9% at 46.76 million tons for the fiscal year ended June 30, 2019 in comparison to 45.90 million tons last year. Export sales volumes registered an increase of 37.4% to reach 6.52 million tons as compared to 4.75 million tons last year and the local sales volume registered a decline of 2.2% to 40.24 million tons during the fiscal year ended June 30, 2019 in comparison to 41.15 million tons last year.

In comparison to the Cement Industry, your Company's overall sales volume declined by 1.8% to reach 7.67 million tons during the current fiscal year. The local cement sales volume registered a decline of 11.7% and were 5.85 million tons in comparison to 6.63 million tons last year, however the export sales volumes of the Company improved by 60.9% to 1.82 million tons as compared to 1.13 million tons last year.

On a consolidated basis, your Company achieved a gross turnover of PKR 136.59 billion which is 9.6% higher as compared to last year's turnover of PKR 124.68 billion.

Moreover, consolidated Net Profit of the Company was PKR 12.35 billion of which PKR 1.02 billion is attributable to non-controlling interests which translates into an EPS of PKR 35.03 during the fiscal year ended June 30, 2019 as compared to PKR 45.83 during last year.

a. Production & Sales Volume Performance - Standalone

The standalone production and sales statistics of your Company for the current fiscal year ended June 30, 2019 compared to last year are as follows:

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 fiscal year ended 2018-19 in comparison with last year is presented below:

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

b. Financial Performance - Standalone

The standalone financial performance of your Company for the fiscal year ended June 30, 2019 as compared to last year is presented below:

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

With the arrival of over 90% of plant and machinery shipments; the civil, erection and fabrication work at project site is in full swing and remains on target to achieve commercial operations in the second quarter of the financial year 2019-20.

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]

KLM commenced CKD operations within the originally envisaged project timelines. Its state-of- the-art facility has the capacity to produce 50,000 vehicles per annum on a double shift basis. The booking of "SPORTAGE" an SUV being KLM's first model started on 30th June 2019 and delivery thereof will start from the end of July 2019. The booking of "PICANTO" hatchback being KLM's second model is expected to start in August 2019 and delivery thereof from October 2019.

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

The first shipment of Plant and Machinery from Sinoma is expected to start from the month of October 2019. The letter of credit for Power Plant has been established and shipment from Wartsila is expected in the month of December 2019. Civil team has been mobilized and contract of mechanical work will be finalized in August 2019 and team will be mobilized accordingly. Target to achieve commercial production is by the end of first quarter of financial year 2020-21.

Your Company has a proven history and track record of its strong commitment for the improvement of society and the communities in which it operates. The primary focus of CSR initiatives of your Company remains in the education sector, women empowerment, health, environment conservation and community development.

Education / Scholarships

Continuing with its long-term vision to provide merit-based support for the deserving and less privileged segments of the society, your Company continued to extend a number of scholarships to various students of leading universities in Pakistan and abroad.

Women Empowerment

Your Company's focus on women empowerment through education has strengthened its collaboration with Zindagi Trust by supporting the two leading Government girls' schools in Karachi. These schools have been transformed into model girls' educational institutions in Pakistan.

Health Initiatives

The provision of quality healthcare for the society at large, has always remained your Company's priority, especially through the financial support of 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. Tabba Heart has achieved a trend-setting image in the field of cardiac healthcare by setting-up one of a kind preventive cardiology and rehabilitation department. Tabba Kidney, on the other hand has grown into the largest hemodialysis centre of Pakistan, providing complete medical care and surgical support in pediatric and adult urology.

Moreover, in the current financial year, your Company also provided financial support to Shaukat Khanum Memorial Cancer Hospital, Pakistan Welfare Association of the Blind and World Memon Organization.

Environment Conservation

Your Company always takes serious responsibility towards the conservation of Environment 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. Furthermore, in an effort to highlight the importance of sustainability amongst the employees, your Company also extended the tree plantation drive by distributing free saplings to its employees to further encourage and promote the importance of green environment for the employees and their families.

Community Development Programs

Your company believes in the importance of giving back to the community and therefore, continues to make efforts to uplift the underprivileged communities and for this cause your Company recently installed five solar energy based tube wells at various targeted locations near its Cement plant in the north at Jhang Khel, Wazir Kala, Shehbaz Khel, Tabi Murad and Azghar Khel, where earlier, only limited facilities for drinking water were available.

With the current economic challenges and the post IMF (fund facility arrangements' signing) macro-economic situation, your Company believes that in short to medium-term, the Outlook of the Cement industry will continue to remain challenging for the domestic sales. Export sales are anticipated to remain stable, however, prices will come under pressure due to regional competition.

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 strong financial position and free cash flow generating ability is anticipated to further support its Vision to improve operational efficiencies as well as make new investments, which can bring in further improvement in efficiencies and enhance shareholders' value.

Taking into consideration the current capital and equity investment plans; the board has proposed the final cash dividend of PKR 6.50 per share subject to the approval of shareholders in the upcoming Annual General Meeting scheduled to be held on September 27, 2019.

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:

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: July 27, 2019

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