Another Year of Unprecedented Success: Record-Breaking Profit and Dividend Declaration Propel Lucky Cement to New Heights of Success.
Pakistan (Muhammad Yasir) Continuing its streak of surpassing milestones, Lucky Cement Limited achieved an all-time high consolidated profit after tax of PKR 59.5 billion for the year ended June 30, 2023, with PKR 10.8 billion attributed to non-controlling interests. This marks an impressive 63.5% surge compared to the same period last year, translating to an EPS of PKR 152.97. The remarkable increase in profit includes gain on disposal made by Lucky Core Industries, a subsidiary company, of approximately 26.5% of the issued and paid-up share capital of NutriCo Morinaga (Private) Limited resulting in an after-tax gain of PKR 9.6 billion.
In response to inquiries about the financial results for the year ended June 30, 2023, a Lucky Cement spokesperson expressed sincere gratitude for the Company’s outstanding accomplishments. These achievements were attributed to the gracious blessings of the Almighty. “Our recent journey has been punctuated by significant milestones, including the commencement of profitable operations of Lucky Electric Power Plant, the strategic part-sale of NutriCo Morinaga, , the announcement of a new 1.82 MT production line in Samawah, Iraq, a substantial 3.15 MT expansion in our cement division, the strategic integration of solar power plants for self-sustained energy consumption, the successful conclusion of our 1st share buyback initiative, and the start of a 2nd share buyback. An integral facet of our accomplishments is the unwavering dedication of our employees, who consistently exemplify a profound commitment to growth and operational efficiency. Their steadfast determination resonates in every interaction,” the spokesperson elaborated.
Moreover, following the successful completion of the Company’s first buy-back of 10.0 million shares, the Company has started another buy-back of 23.8 million of its own shares, slated for completion on November 20th, 2023. By repurchasing its own shares, the Company aims to optimize its capital structure and unlock additional value for its stakeholders. This buy-back initiative showcases the Company’s proactive approach in managing its financial resources, fostering investor confidence and reinforcing its commitment to maximizing long-term shareholder value.
On a consolidated basis, the Company attained a gross revenue of PKR 459.5 billion showcasing a significant 15.8% increase compared to the revenue of PKR 396.7 billion during last year. The noteworthy growth in gross revenue is mainly attributable to the full-year’s commercial operations of Lucky Electric Power Company Limited.
On an unconsolidated basis, the Company reported a gross revenue of PKR 125.8 billion, which signified an increase of 15.9% as compared to the last year. The Company reported a net profit after tax of PKR 13.7 billion. Moreover, the EPS for the period is calculated at PKR 43.06, as compared to an EPS of PKR 47.31 during last year. This slight decline in the Company’s profitability is attributed to lower dividend income from subsidiaries and higher tax charge during the current year.
Along with the announcement of financial results, the Board of Directors of the Company has recommended a final dividend of PKR 18 per share.
Aligning with its growth strategy, the Company had announced the commencement of operations of Line-2, at Pezu Plant on December 22, 2022. This addition increases the production capacity of the Company’s cement production by 3.15 Million Tons Per Annum (MTPA), thereby, bringing the total capacity to 15.30 MTPA. After the successful completion of the aforesaid expansion, the Company has further reinforced its rank and prominence as the largest manufacturer and exporter of cement and clinker in Pakistan.
Furthermore, to meet growing cement demand in Iraq and secure clinker supply for our associated company, Al Mabrooka Cement Manufacturing Company Limited, the decision has been made to expand clinker production capacity in Najmat Al Samawah Company for Cement Industry, Iraq. This involves adding a new 1.82 million tons per annum production line, enhancing operational efficiency, and promoting clinker self-reliance in Iraq. Engineering contracts are in place, negotiations with potential contractors are ongoing, and construction is set to start in 1Q FY24, with an estimated 18-month completion timeline.
Continuing its commitment to clean energy, post the successful 34 MW solar power project, the Company has finalized commercial negotiations for a 25 MW Solar Power Project at Karachi Plant. Procurement of essential equipment and materials is finished, with the project anticipated for completion in 2Q FY24. These investments align with the Company’s goals of advancing renewable energy, reducing fuel import reliance, and enhancing cost-efficiency.
Moreover, in line with the Company’s commitment towards environment sustainability, it has won CSR award in the “Green Energy Initiative” category for adopting renewable energy solutions to promote environmental conservation and ensure sustainable business operations. The Company also secured 1st rank for its ESG reporting by the CFA Society.
The Company firmly upholds its commitment to various important causes, including education, women’s empowerment, health, environmental conservation, and community development, as part of its Corporate Social Responsibility (CSR) initiatives.
Amidst ongoing economic challenges like high inflation, interest rates, and weakening currency, cement demand remains under pressure. Prospects of political stability and redirected funds for Public Sector Development offer potential economic revitalization and increased cement demand. Easing commodity super cycle effects, reflected in falling oil and coal prices, are favorable for the cement industry, boosting margins via reduced coal costs. Yet, concerns persist, with potential Pakistani Rupee devaluation and higher energy tariffs posing margin pressure and export competitiveness risks across sectors.