Lucky boosted by higher volumes and pricing

Pakistan’s largest cement producer, Lucky Cement, reported a net profit of PKR11.3bn (US$110.34m) for the fiscal ending 30 June 2014, up 16.4 per cent compared to PKR9.7bn in the previous year.

Earnings growth was primarily supported by higher sales volumes and prices during the period. On a quarterly basis, earnings grew four per cent QoQ to PKR3.15bn.

Revenue increased 14 per cent YoY to PKR43.08bn during FY14 because of a nine per cent rise in sales volumes to 6.62Mt and a 14 per cent YoY increase in local cement prices to PKR506/50kg bag.

Despite the rise in prices, gross margins declined by one percentage point to 43 per cent during FY14 due to a 17 per cent increase in gas tariff and a PKR50/mmbtu rise in the Gas Infrastructure Development Surcharge as of 1 January 2014.

Lucky Cement has various efficiency projects in the pipeline, including 5MW waste heat recovery units ant both its cement plants, a vertical grinding mill at its Karachi works and a tyre derived fuel facility at its Pezu plant. It also plans to install a 660MW coal-based electricity coal generation facility.

Its joint venture grinding facility in Iraq started commercial operations in February and its Congo project is due to begin commercial operations in mid-2016.