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Half-year Report

31 Jan 2019 11:23

RNS Number : 6890O

Lucky Cement Limited

31 January 2019

To view the full document, please paste the following URL into the address bar of your browser.

http://www.rns-pdf.londonstockexchange.com/rns/6890O_1-2019-1-31.pdf

LCK/CS/2018-19/ January 31, 2019

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 HALF YEAR ENDED DECEMBER 31, 2018

This is to inform you that the Board of Directors of our Company in their meeting held on Thursday, January 31, 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 Nil

(ii) Bonus Issue Nil

(iii) Right Issue Nil

(iv) Interim Dividend Nil

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

The Half Yearly report of the Company for the period ended December 31, 2018 will also be transmitted through PUCARS separately, within the specified time.

Yours truly

for LUCKY CEMENT LIMITED

IRFAN CHAWALA

Director Finance / CFO

Unconsolidated Condensed Interim Statement of Financial Position
As at December 31, 2018
		(Un-audited)		(Audited)
		December 31,		June 30,
		2018		2018
			(PKR in '000')
ASSETS
NON-CURRENT ASSETS
	Fixed assets
	Property, plant and equipment		44,961,909	40,913,168
	Intangible assets		39,622	55,023
			45,001,531	40,968,191

	Long-term investments		31,417,700	24,981,078
	Long-term loans and advances		103,596	90,996
	Long-term deposits		3,175	3,175
			76,526,002	66,043,440
CURRENT ASSETS
	Stores and spares		8,050,866	7,783,111
	Stock-in-trade		2,915,297	2,796,658
	Trade debts		2,410,197	2,424,470
	Loans and advances		423,023	420,671
	Trade deposits and short term prepayments		78,062	67,577
	Accrued return		197,352	142,881
	Other receivables		1,512,116	1,311,180
	Tax refunds due from the Government		538,812	538,812
	Short term investment		525,329	34,956
	Cash and bank balances		22,169,822	27,435,361
			38,820,876	42,955,677

TOTAL ASSETS			115,346,878	108,999,117

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Share capital			3,233,750	3,233,750
Reserves			86,037,563	83,133,072
			89,271,313	86,366,822
NON-CURRENT LIABILITIES

	Long-term deposits		90,994	94,394
	Deferred liabilities		7,032,294	7,300,639
			7,123,288	7,395,033
CURRENT LIABILITIES
	Trade and other payables		15,415,516	13,121,005
	Short term running finance		1,000,000	-
	Unclaimed dividend		59,716	47,945
	Unpaid dividend		91,119	82,960
	Taxation - net		2,385,926	1,985,352
			18,952,277	15,237,262

			26,075,565	22,632,295

TOTAL EQUITY AND LIABILITIES			115,346,878	108,999,117

Unconsolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income
For the half year ended December 31, 2018 (Un-audited)

			Half Year Ended		Quarter Ended
			December 31, 2018	December 31, 2017	December 31, 2018	December 31, 2017
			(PKR in '000')		(PKR in '000')

Gross sales			34,885,341	32,852,077	18,874,278	17,156,894

Less: Sales tax and federal excise duty			9,484,395	9,149,825	5,093,783	4,857,234
		Rebates and commission	445,871	448,424	230,488	249,613
			9,930,266	9,598,249	5,324,271	5,106,847

Net sales			24,955,075	23,253,828	13,550,007	12,050,047

Cost of sales			(17,531,060)	(14,368,087)	(9,550,411)	(7,277,550)

Gross profit			7,424,015	8,885,741	3,999,596	4,772,497

Distribution cost			(1,374,509)	(813,183)	(716,990)	(443,832)
Administrative expenses			(559,645)	(556,503)	(285,869)	(275,235)
Other expenses			(570,602)	(616,749)	(325,146)	(322,494)
Other income			1,606,571	1,195,338	962,242	662,942

Profit before taxation			6,525,830	8,094,644	3,633,833	4,393,878

Taxation
		-current	(1,433,590)	(1,486,683)	(883,235)	(553,578)
		-deferred	408,549	(60,828)	257,360	(310,450)
			(1,025,041)	(1,547,511)	(625,875)	(864,028)

Profit after taxation			5,500,789	6,547,133	3,007,958	3,529,850

Other comprehensive income:
Other comprehensive loss which will not be reclassified to
statement of profit or loss in subsequent periods

	Unrealized loss on remeasurement of equity investment at fair value through other

	comprehensive income		(10,938)	(5,805)	(4,602)		(690)
	Deferred tax thereon		1,640	871	690		104
			(9,298)	(4,934)	(3,912)	(586)

Total comprehensive income for the period			5,491,491	6,542,199	3,004,046	3,529,264

			(PKR)		(PKR)

Earnings per share - basic and diluted			17.01	20.25	9.30	10.92

Condensed Interim Consolidated Statement of Financial Position
As at December 31, 2018

		(Un-audited)	(Audited)
		December 31,	June 30,
		2018	2018
		(PKR in '000')
ASSETS
NON-CURRENT ASSETS
	Fixed assets
	Property, plant and equipment	92,449,115	73,865,002
	Intangible assets	7,775,543	7,943,988
		100,224,658	81,808,990

	Long-term investments	15,373,556	13,642,987
	Long-term loans and advances	565,605	534,786
	Long-term deposits and prepayments	47,192	53,325
		116,211,011	96,040,088
CURRENT ASSETS
	Stores, spares and consumables	9,194,878	8,854,536
	Stock-in-trade	12,849,417	12,088,621
	Trade debts	4,814,834	5,142,591
	Loans and advances	1,760,554	1,117,485
	Trade deposits and short-term prepayments	3,149,789	1,108,185
	Other receivables	3,727,796	3,431,926
	Tax refunds due from the Government	538,812	538,812
	Taxation receivable	2,145,076	2,221,851
	Accrued return	206,077	161,742
	Short term investments	525,329	34,956
	Cash and bank balances	25,707,497	34,382,272
		64,620,059	69,082,977
TOTAL ASSETS		180,831,070	165,123,065

EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES


Share capital		3,233,750	3,233,750
Reserves		98,836,312	93,913,157

	Attributable to the owners of the Holding Company	102,070,062	97,146,907
	Non-controlling interests	14,864,553	12,428,264
	Total equity	116,934,615	109,575,171

NON-CURRENT LIABILITIES

	Long-term finances	11,494,906	8,789,887
	Long-term deposits	90,994	94,394
	Deferred liabilities	10,113,142	10,640,736
	Other long term liabilities	4,130,772	3,431,948
		25,829,814	22,956,965
CURRENT LIABILITIES
	Trade and other payables	24,595,554	20,242,935
	Unclaimed dividend	59,716	47,945
	Unpaid dividend	91,119	82,960
	Provision for taxation	2,385,926	1,992,278
	Accrued return	326,697	272,146
	Short-term borrowings and running finance	7,977,487	7,332,327
	Current portion of liabilities against assets subject to finance lease	134	822
	Current portion of long-term finances	2,630,008	2,619,516
		38,066,641	32,590,929
		63,896,455	55,547,894

TOTAL EQUITY AND LIABILITIES		180,831,070	165,123,065

Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the half year ended December 31, 2018 (Un-audited)

		Half Year Ended		Quarter Ended
		December 31,	December 31,	December 31,	December 31,
		2018	2017	2018	2017
		(PKR in '000')		(PKR in '000')

Revenue		67,854,061	59,766,088	36,538,607	31,082,652

Less: Sales tax and excise duty		11,301,849	10,554,415	6,058,883	5,592,056
	Rebates and commission	2,832,361	2,457,306	1,604,495	1,319,084
		14,134,210	13,011,721	7,663,378	6,911,140

		53,719,851	46,754,367	28,875,229	24,171,512

Cost of sales		(42,020,952)	(33,587,614)	(22,764,288)	(17,093,671)

Gross profit		11,698,899	13,166,753	6,110,941	7,077,841

Distribution cost		(2,837,830)	(2,152,288)	(1,454,128)	(1,140,194)
Administrative expenses		(1,531,627)	(1,442,077)	(775,797)	(821,054)
Finance cost		(774,333)	(314,595)	(417,120)	(149,498)
Other expenses		(901,980)	(1,111,190)	(560,207)	(712,471)
Other income		1,923,716	2,196,681	770,974	972,943

Profit before taxation		7,576,845	10,343,284	3,674,663	5,227,567

Taxation
	- current	(2,123,114)	(1,916,509)	(1,059,506)	(654,580)
	- deferred	683,531	150,104	360,315	(163,839)
		(1,439,583)	(1,766,405)	(699,191)	(818,419)

Profit after taxation		6,137,262	8,576,879	2,975,472	4,409,149

Attributable to:
Owners of the Holding Company		5,795,505	7,914,236	2,839,705	4,067,067
Non-controlling interests		341,757	662,643	135,767	342,082

		6,137,262	8,576,879	2,975,472	4,409,149

Other comprehensive income for the period

Other comprehensive income which may be reclassified to statement of
profit or loss in subsequent periods

	Foreign exchange differences on translation of foreign operations	1,200,556	363,078	1,011,443	327,092

Other comprehensive loss which will not be reclassified to statement of
profit or loss in subsequent periods

	Unrealized loss on remeasurement of equity investment at fair value through other comprehensive income	(10,938)	(5,805)	(4,602)	(690)
	Deferred tax thereon	1,640	871	690	104
		(9,298)	(4,934)	(3,912)	(586)

Total comprehensive income for the period		7,328,520	8,935,023	3,983,003	4,735,654

Attributable to:
Owners of the Holding Company		6,986,763	8,272,380	3,847,236	4,393,572
Non-controlling interests		341,757	662,643	135,767	342,082

		7,328,520	8,935,023	3,983,003	4,735,654

		(PKR)		(PKR)

Earnings per share - basic and diluted		17.92	24.47	8.78	12.58

Directors' Report (Condensed)

The Directors have the pleasure in presenting to you the financial results of your Company which include both, stand-alone (duly reviewed by the auditors) and consolidated unaudited financial statements for the half year ended December 31, 2018.

Overview

Cement industry in Pakistan grew by 3.9% to 23.12 million tons during the half year ended December 31, 2018 in comparison to 22.24 million tons during the same period last year. While local sales volume registered a decline of 1.4% to 19.56 million tons during the half year in comparison to 19.84 million tons during the same period last year; export sales volume registered an increase of 47.9% to 3.56 million tons during the half year under review as compared to 2.41 million tons reported in the same period last year.

In comparison to the Cement Industry, your Company's overall sales grew by 6.8% to reach 4.01 million tons during the current half year under review; where, local cement sales volume registered a decline of 6.8% (North 10.8% and South 2.1%) in the current half year to reach 2.99 million tons in comparison to 3.21 million tons in the same period last year. On the other hand, export sales volumes of your Company more than doubled in the current half year and improved by 109.0% to reach 1.02 million tons as compared to 0.49 million tons during the same period last year.

On a consolidated basis, your Company achieved a gross turnover of PKR 67.85 billion which is 13.5% higher as compared to the same period last year's turnover of PKR 59.77 billion.

Moreover, consolidated Net Profit of the Company was PKR 6.14 billion of which PKR 0.34 billion is attributable to non-controlling interests which translates into an EPS of PKR 17.92 during the current half year ended December 31, 2018 as compared to PKR 24.47 during the same period last year.

Business Performance

a. Production & Sales Volume Performance - Standalone

The standalone production and sales statistics of your Company for the current half year ended December 31, 2018 compared to the same period last year are as follows:

Particulars	Half Year 2018-19 (Tons in ‘000’)	Half Year 2017-18	Growth / (Decline) %
	Half Year 2018-19 (Tons in ‘000’)	Half Year 2017-18	Growth / (Decline) %

Clinker Production	3,742	3400	10.1%
Cement Production	3,458	3,677	(6.0%)
Cement Sales	3,501	3,698	(5.3%)
Clinker Sales	513	59	769.5%

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 current half year of the financial year 2018-19 with the same period last year is presented below:

Particulars	Half Year 2018-19	Half Year 2017-18	Growth / (Decline) %
	(Tons in ‘000’)

Cement Industry

Local Sales	19,558	19,836	(278)	(1.4%)

Export Sales
- Bagged	2,205	2,326	(121)	5.2%
- Loose	39	81	(42)	(51.9%)
- Clinker	1,316	-	1,316	100.0%
Total Exports	3,560	2,407	1,153	47.9%
Grand Total	23,118	22,243	875	3.9%

Lucky Cement

Local Sales
- Cement	2,992	3,209	(217)	(6.8%)
- Clinker	-	59	(59)	(100.0%)
Total Local Sales	2,992	3,268	(276)	(8.4%)

Export Sales
- Bagged	470	408	62	15.2%
- Loose	39	81	(42)	(51.9%)
- Clinker	513	-	513	100.0%
Total Exports	1,022	489	533	109.0%
Grand Total	4,014	3,757	257	6.8%

Market Share	Half Year 2018-19	Half Year 2017-18	Growth / (Decline) %
Local Sales	15.3%	16.5%	(7.3%)
Export Sales
- Bagged	21.3%	17.5%	21.7%
- Loose	100.0%	100.0%	0.0%
- Clinker	39.0%	-	100.0%
Total Export	28.7%	20.3%	41.4%
Grand Total	17.4%	16.9%	3.0%

b. Financial Performance - Standalone

The standalone financial performance of your Company for the half year ended December 31, 2018 as compared to the same period last year is presented below:

Particulars	Half Year 2018-19	Half Year 2017-18	% Change
Gross Revenue	34,885	32,852	6.2%
Net Revenue	24,955	23,254	7.3%
GP	7,424	8,886	(16.5%)
OP	5,490	7,516	(27.0%)
EBITDA	7,157	8,910	(19.7%)
NP	5,501	6,547	(16.0%)
EPS	17.01 /Share	20.25 /Share	(16.0%)

Revenue

During the half year of 2018-19 under review, your Company achieved an overall gross sales revenue growth of 6.2% as compared to the same period last year. This was mainly attributable to higher export volumes for clinker and cement.

Cost of Sales

During the half year under review, per ton cost of sales of your Company increased by 14.2% as compared to the same period last year. This increase was mainly on account of increase in coal, packing material and other fuel prices.

Distribution of Gross Revenue

Distribution of Cost of Sales

Gross Profit

Your Company achieved a gross profit margin of 29.7% for the half year under review as compared to 38.2% reported during the same period last year.

Net Profit

Your Company achieved a profit before tax of PKR 6,525.8 million during the half year under review as compared to PKR 8,094.6 million reported during the same period last year. Similarly, after tax profit of PKR 5,500.8 million was achieved during the half year under review as compared to PKR 6,547.1 million reported during the same period last year.

Earnings per share

The earnings per share of your Company for the half year ended December 31, 2018 was PKR 17.01 in comparison to PKR 20.25 reported during the same period last year.

Projects - New and Ongoing

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

The civil works are progressing as per schedule and plant & machinery shipments have started arriving at the project site. The erection and fabrication work is also progressing satisfactorily and as per schedule to achieve commercial operations in the second quarter of financial year 2019-20.

Investments

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 well and as per project implementation schedule. Target to achieve commercial operations remains 1st March 2021.

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

On 1st June 2018, KLM started its Complete Built Up (CBU) operations. It has opened up, company owned / third party operated dealerships in some of the metro cities of Pakistan. Target to start commercial production is for the first quarter of financial year 2019-20.

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

The project has achieved financial close and the letter of credit to import plant and machinery was opened in the month of December 2018. Levelling work at project site started in the month of January 2019 and civil works are expected to commence in March 2019. Target to achieve commercial production is for the last quarter of financial year 2019-20.

Corporate Social Responsibility

Your Company remains committed to value creation in the society and the communities in which it operates, with primary focus of its CSR initiatives in Education, Women empowerment, Community development, Health and Environment conservation.

Education / Scholarships

Continuing on the agenda to support deserving students, during the first half of the financial year under review, your Company extended a number of scholarships to various students of LUMS, IBA and other leading universities in Pakistan and abroad.

Women Empowerment

Prioritizing its emphasis on women empowerment, your company continued to extend its full support for two leading Government girls' schools in Karachi in collaboration with Zindagi Trust. With the primary objective of social intervention in the development of women's education in the Country, your Company has transformed these schools into model educational institutions for girls of Pakistan.

Community development

Working on the key agenda of Community development; your Company sponsored certain events of World Memon Organization, which is known for its charitable initiatives and donations for community development. Furthermore, your Company also made contributions for certain annual events organized by Special Olympics Pakistan.

Health Initiatives

Provision of quality healthcare has remained your Company's priority, especially through financial support to 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. In this regard, your company also provided financial support to the First International Pediatric Urology Congress, held by the Tabba Kidney Institute.

Environment Conservation

Your Company always takes serious responsibility towards the environment. In an effort to highlight the importance of environment conservation during the first half of the financial year under review, a tree plantation drive was launched and free tree saplings were distributed amongst the employees to contribute towards making Pakistan greener and environment friendly.

Outlook

The future outlook for the Cement industry remains promising and your Company remains hopeful for improvement in domestic sales going forward on account of Government's key initiatives to build both small and mega-capacity / multipurpose water reservoirs / dams and '5 million housing scheme' to construct affordable houses for public at large; whereas, export sales are anticipated to remain strong in view of favorable market dynamics and increasing demand for Clinker in the regional countries.

Your Company believes that its strong financial position and free cash flow generating ability can continue to support investments in projects and avenues which can bring in further operational efficiencies and enhance shareholders' value.

Acknowledgement

Directors of your Company take pleasure in expressing their sincere gratitude and appreciation for excellent commitment and contribution of all the employees and continued trust and confidence 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: January 31, 2019

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR UAORRKUAAOAR

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30th Jan 2023	7:00 am	RNS	Half-year Report
3rd Jan 2023	7:00 am	RNS	Material Information
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5th Aug 2022	12:08 pm	RNS	Annual Financial Report
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28th Apr 2022	10:23 am	RNS	3rd Quarter Results
21st Mar 2022	8:00 am	RNS	Material information
28th Jan 2022	2:32 pm	RNS	Half-year Report
28th Oct 2021	2:51 pm	RNS	1st Quarter Results
9th Aug 2021	7:00 am	RNS	Annual Financial Report
29th Apr 2021	7:00 am	RNS	3rd Quarter Results
1st Feb 2021	9:54 am	RNS	Half-year Report
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26th Oct 2020	7:00 am	RNS	1st Quarter Results
25th Aug 2020	11:47 am	RNS	Annual Financial Report
24th Apr 2020	12:11 pm	RNS	3rd Quarter Results
30th Jan 2020	9:25 am	RNS	Change Director Finance & Chief Financial Officer
30th Jan 2020	8:04 am	RNS	Half-year Report
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29th Jul 2019	11:39 am	RNS	Annual Financial Report
28th Jun 2019	12:26 pm	RNS	Material Information
7th May 2019	10:44 am	RNS	3rd Quarter Results
31st Jan 2019	11:23 am	RNS	Half-year Report
29th Oct 2018	2:08 pm	RNS	1st Quarter Results
10th Oct 2018	11:04 am	RNS	Directors, Appointment of Chairman & CEO
31st Jul 2018	11:55 am	RNS	Annual Financial Report
26th Jun 2018	7:18 am	RNS	Material Information
30th Apr 2018	7:00 am	RNS	Material Information
27th Apr 2018	11:32 am	RNS	3rd Quarter Results-Financial Results-2018
26th Jan 2018	12:55 pm	RNS	Half-year Report
19th Dec 2017	7:00 am	RNS	Line H Production
30th Oct 2017	12:36 pm	RNS	1st Quarter Results
31st Jul 2017	2:37 pm	RNS	Final Results
4th Jul 2017	7:00 am	RNS	Appoint/Change Director Fin/CFO and Co Secretary
24th Apr 2017	12:52 pm	RNS	3rd Quarter Results
26th Jan 2017	1:11 pm	RNS	Half-year Report
15th Dec 2016	12:26 pm	RNS	Material information
27th Oct 2016	1:27 pm	RNS	1st Quarter Results
1st Sep 2016	2:22 pm	RNS	Annual Financial Report
29th Jul 2016	8:10 am	RNS	Material information - New Line H
25th Apr 2016	1:10 pm	RNS	3rd Quarter Results
6th Apr 2016	11:32 am	RNS	Company Secretary Change
22nd Feb 2016	12:57 pm	RNS	Half Yearly Report
3rd Dec 2015	8:59 am	RNS	Re-Appointment of CEO

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