Pakistan’s Lucky Cement Ltd has reported a PAT of PKR8.29bn (US$58.53m) during the nine-month period ended 31 March, a 15.4 per cent fall compared to PKR9.80bn of last year. The profit declined despite the company having achieved an overall gross sales revenue growth of 3.3 per cent YoY to PKR52.32bn from PKR50.63bn, with the increase attributed to higher export sales volumes for clinker. However, the cost of sales during the 9MFY18-19 increased by 14.1 per cent per tonne, mainly due to an increase in coal, packing material and other fuel prices.
Lucky Cement’s overall sales grew by 1.9 per cent to 5.95Mt during the nine-month period. Local cement sales registered a 12.2 per cent decrease to 4.42Mt in comparison to 5.04Mt last year. Meanwhile, export sales improved by 105.5 per cent to 1.53Mt from 0.74Mt during the same period of last year.
Across the country’s cement industry, the drop in local sales reduced the overall sales volumes by 0.5 per cent to 34.58Mt for the nine months, against 34.76Mt during the year-ago period. Exports advanced 49 per cent to 5.13Mt from 3.44Mt, while the local sales volume declined six per cent YoY to 29.45Mt from 31.31Mt of the 9MFY17-18.
Projects
The civil work at the company’s 2.6Mta brownfield cement plant expansion in Khyber Pakhtunkhwa, Pakistan, is reportedly progressing as per target timelines. The company added that the project is expected to enter commercial operation in the 2QFY19-20.
The contract for the design and civil works has been finalised for a 1.2 Mta greenfield clinker production facility in Samawah, Iraq. Commercial production has been forecast to begin in the 1Q20-21.
Outlook
In the short to medium-term, Lucky Cement expects the cement industry to be challenging for domestic sales. However, export sales are anticipated to remain strong in view of favourable market dynamics and the rising demand for clinker in regional countries.
