Lucky Cement profit squeezes in FY19

Lucky Cement Ltd informed the Pakistan Stock Exchange (PSX) on 29 July that its net profit after tax during FY19 stood at PKR10.5bn (US$65.16m), down 14 per cent YoY. The results were accompanied by a cash dividend of PKR6.5/share.
 
The company overall sales volume declined by 1.8 per cent to reach 7.67Mt during the current fiscal year. The local cement sales volume registered a decline of 11.7 per cent and totalled 5.85Mt in comparison to 6.63Mt last year. However, the export volumes improved by 60.9 per cent to 1.82Mt as compared to 1.13Mt last year.

With regards to its investment projects, the greenfield clinker production facility in Iraq is set to achieve commercial operations by 1QFY21. Additionally, brownfield expansion of cement line in north, Khyber Pakhtunkhwa province (capacity of 2.6Mt) is on track to start production in 2QFY20.

Outlook
With the current economic challenges and the post IMF (fund facility arrangements' signing) macro-economic situation, the company believes that in short to medium-term, the outlook of the cement industry will continue to remain challenging for the domestic sales. Export sales are anticipated to remain stable, however, prices will come under pressure due to regional competition.

In the long-term, cement industry's outlook remains promising on account of government's key initiatives to build both small and mega-capacity/multipurpose water reservoirs/dams and construction of low-cost affordable houses for public at large.