Lucky Cement reported a profit of Rs17.15 billion on a consolidated basis, translating into earnings per share (EPS) of Rs40.66/share for the half year ended December 31, 2021.
The company’ EPS was recorded at Rs32.05/share during the same period last year.
The company achieved gross turnover of Rs154.50 billion which is 24.9 per cent higher, as compared to the turnover of Rs123.72 billion during the same period last year.
The increase in the net profit was mainly attributed to the stellar performance of the chemicals business. Apart from the one-off unrealised accounting gains recognised on the acquisition of controlling shares in NutriCo Pakistan amounting to Rs1.847 billion.
The chemical business achieved considerable improvement in the net profitability on account of impressive growth in its polyester, pharma and animal health business segments.
In the automobile business, Lucky Motor Corporation introduced Kia Stonic in its line up, and started the commercial production of Samsung branded mobile phones during the half year under review.
The profitability of the company’s overseas operations increased mainly due to the improvement in sales volume and operations of the company’s joint venture, the greenfield cement plant in Samawah, Iraq, which commenced commercial operations in March 2021.
Lucky Cement also reported progress on its brownfield plant expansion activities in Khyber-Pakhtunkhwa (KP) with project completion targeted for December 2022.
The construction activity for setting up a 660MW supercritical, lignite coal-based power plant is near to completion and it has been synchronised with the national grid in November 2021. The Project is currently under testing phase, and it is targeted to achieve commercial operations in February 2022.
While the previous waves of Covid-19 receded in the past, the pandemic continues to resurge with different variants of the virus. Even with the persistent drive of the government on compliance of SOPs and getting the masses vaccinated, prudent expectation is that the volatile infection rates will continue for the time being.
Lucky Cement, however, expects that the economy will continue to show resilience against the adverse impacts of such pandemic.
On the other hand, the ongoing inflationary trend in commodities globally has resulted in an increase in cost of inputs, such as coal, diesel, furnace oil and freight charges, which are a major cost component of cement.
The currency devaluation has further impacted and increased these costs. Due to the increase in costs of other construction materials, the local demand will remain flat. At the same time, cement prices have only partially offset the increase in input costs faced by the manufacturers.
The construction of dams, hydropower projects, real estate development and low cost housing schemes will help to maintain the demand of cement in the medium to long term.