KARACHI: Lucky Cement Company Limited has decided to increase equity investment from Rs 12 billion to Rs 14 billion in its associate company, Kia Lucky Motors Pakistan Limited while the company is now also authorized to make an equity investment of Rs 720 million in its new 50MW Wind Power Project.
Lucky Cement, on Monday, announced that in addition to the proposed equity investment in Yunus Wind Power Limited, the company is also in the process of evaluation to make equity investment up to Rs 720m for development of an additional 50 MW Wind Farm, jointly with other group companies through acquisition of an existing project company subject to the approval of the board and shareholders of the company. Lucky Cement announced its first quarter (July-September) fiscal year 2017-18 (FY18) financial result, where it posted unconsolidated earnings of Rs 9.33/share, down by 7% YoY and 11% QoQ. The result was in-line with our EPS estimate of Rs 9.1. On consolidated basis, EPS for the quarter was reported at Rs 11.9, up 2% YoY. Along with the financial results, the company announced an interim cash dividend of Rs 5/share in order to avoid additional taxation of 7.5% imposed on undistributed profits under section 5A of the Income tax Ordinance 2001 amended through Finance Act 2017. However it is pertinent to note that company is already under litigation phase and submitted the respective petition 3 months ago in Sindh High Court and wishes to pursue with full force going forward. Revenue of the company witnessed an accretion of 6%YoY to Rs 11.2b, while sequentially it grew by 4%QoQ. This growth was primarily attributable to 6% augmentation in total dispatches, where local sales (inclusive of clinker) accreted by 14%YoY, while exports decline by 25%YoY. Gross margin of the company declined by a massive 14pptYoY to 36.7% which was primarily on the back of higher power and fuel costs, lower margin clinker sales and significantly lower cement prices in KPK region.
Published in Daily Times, October 31st 2017.