MIRA
INFORM REPORT
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Report Date : |
08.10.2007 |
IDENTIFICATION DETAILS
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Name : |
LUCKY CEMENT LIMITED |
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Registered Office : |
Pezu District Lakki Marwat, N.W.F.P. |
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Country : |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
1993 |
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Com. Reg. No.: |
0031182 |
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Legal Form : |
Public Limited Company. The shares
of the Company are listed on the Stock Exchanges in |
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Line of Business : |
Manufacturing & Marketing of Cement |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
Business Name
LUCKY CEMENT LIMITED
Full Address
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Registered Address |
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Pezu District Lakki Marwat, N.W.F.P., Pakistan |
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Tel |
92 (928) 780126, 780123 |
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Fax |
92 (928) 780122 |
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Short Description
Of Business
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Nature of Business |
Manufacturing & Marketing of Cement |
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Year Established |
1993 |
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Registration # |
0031182 |
Branches
In
Auditors
Ford Rhodes Sidat Hyder & Co.
(Chartered
Accountants)
Legal Status
Lucky Cement Limited was incorporated in
Details of
Directors
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Names |
Designation |
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Mr. Muhammad Yunus Tabba Mr. Muhammad Ali Tabba Mr. Muhammad Sohail Tabba Mr. Imran Yunus Tabba Mr. Javed Yunus Tabba Mrs. Rahila Aleem Miss Mariam Razzak Mr. Manzoor Ahmed |
Chairman Chief Executive Director Director Director Director Director Director |
Categories of
Shareholders
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Categories |
Shareholding (%) |
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Individual Investment Companies Insurance Companies Joint Stock Companies Financial Institutions Modaraba Companies Leasing Companies Funds |
52.62 21.42 0.97 9.70 10.36 0.04 0.11 4.78 |
Business Operations
The principal activity of the Company is manufacturing and
marketing of cement. The registered office of the Company is located at Pezu,
District Lakki Marwat in North West Frontier Province (NWFP). The Company has
two production facilities at Pezu, District Lakki Marwat in NWFP and at
Associated
Companies
(1) Gadoon Textile Mills Limited,
(2) Fazal Textile Mills Limited,
(3) Yunus Textile Mills Limited,
(4)
Lucky Textile
(5) Lucky Energy (Private)
Limited, Pakistan.
(6) Lucky Knits (Private)
Limited, Pakistan.
(7)
(8) Security Electric Power
Company Limited,
Number of Employees
More than 1000
Production Capacity
Metric
Tons
2007 2006
Production capacity
Unit 1 (A & B) 1,500,000 1,440,000
Unit 2 (C & D) 2,500,000 2,500,000
Unit 3 (E & F) 2,500,000 1,250,000
Actual Production clinker
Unit 1 (A & B) 1,163,225 1,269,400
Unit 2 (C & D) 1,827,470 823,290
Unit 3 (E & F) 1,522,181 135,188
Actual Production cement
Unit 1 (A & B) 1,340,460 1,389,565
Unit 2 (C & D) 1,679,755 765,927
Unit 3 (E & F) 1,402,485 62,800
Bankers
Allied Bank Limited,
ABN AMRO Bank,
Bank AL-Habib Limited,
Citibank N.A.,
Faysal Bank Limited,
Habib Bank Limited,
Habib Metropolitan Bank Ltd,
KASB Bank Limited,
MCB Bank Limited,
National Bank of
Soneri Bank Limited,
Standard Chartered Bank (
United Bank Limited,
Financial Overview
The financial year ended June 30, 2007 was a great milestone both for the company and the cement industry of the Country. Company has made a land mark achievement by making a record quantitative sales of 4.64 mtpa during the year ended June 30, 2007 against the last year sales of 2.20 mtpa and registered and overall tremendous growth of 111.29% in-spite the fact that most of the company's new expansion lines streamlined operation at different time intervals during this financial year. The industry also achieved a new level of dispatches of 24.22 mtpa against the last year dispatches of 18.34 mtpa and registered an overall robust growth of 32% which is the highest in the history of Pakistan cement industry both in terms of percentage and volumetric growth. During the year under review, Company achieved an overall growth of 111.29% in term of quantity whereas the net sales revenue registered a growth of 55.48% over the last year. The prices of cement were comparatively lower in domestic market compared to last year. The prices of cement in South Zone were comparatively higher than North Zone domestic market. The prices in international market were at premium over domestic markets. The cost per ton of the Company reduced by 17.5% during the year under review because of economy of scale and efficiency in fuel and power consumption in-spite of increase in the prices of coal and oil in the international markets. The gross profit for the year under review registered a growth of 23.32% in terms of value over last year because of volumetric growth in sales and reduction in cost of production.
Sales Growth
There has been a robust growth of cement demand seen both in domestic
and export markets during the financial year ended June 30, 2007. The industry
achieved an overall growth of 32%
with domestic demand of cement increased by 24.95% whereas the exports increased by 111.86%. The overall growth achieved by company for the year under
review was 111.29% consisting of
domestic and export markets at 71.02%
and 335.12% respectively. Company
has been successful to capture export markets of various GCC and African
countries which are new markets for the Country other than the conventional
export markets of
Future Outlook
The economic performance of the Country in terms of GDP growth rate is one of the best performing countries of the region which has been consistently over 6.5% for the last four years. The Public Sector Development Projects (PSDP) allocation for the last five years has been growing with CAGR of 35.5%. The PSDP allocation of Rs.520 billion for the financial year 2007-08 with focus on dams, canal linings, infrastructure work, housing construction, deep sea ports and development work all over the country will lead to a drastic increase in the demand of cement in future. The oil prices boom has led huge construction activities in this region which have resulted in great demand of cement in most of the GCC countries that are facing huge shortage despite of new production capacities coming online. The location of its Karachi Project is ideal for capturing these markets. In addition to the conventional export markets of Afghanistan and Iraq, Company has entered into the export markets in most of the GCC, East and West African Countries and has been able to establish its brand very strongly. On the supply side, the cement production capacity of the country has also increased but not reached the level it was anticipated as on June 30, 2007 because of delay in commissioning of some new production capacities of other companies. India is a big potential market for export of cement from Pakistan but the registration with the Bureau of Indian Standard is a pre requisite. The registration of company with the BIS is at final stages as visit of the plant by BIS engineer has been made. The entry of private investments by reputed international construction companies including Emaar, Nakheel, Al-Ghurair and Meinhardt will also create a sizeable demand of cement in the domestic market.
Foreign Exchange
Rates
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Currency |
Unit |
Pakistani Rupee |
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US Dollar |
1 |
Rs. 60.60 |
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UK Pound |
1 |
Rs. 123.35 |
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Euro |
1 |
Rs. 85.35 |
Comments
Subject Group enjoys good reputation in Pakistan as well as in abroad. All the Group directors are reported as qualified and resourceful businessmen. Trade relations are reported as fair. The Company can be considered for normal business dealings at usual trade terms and conditions.
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LUCKY CEMENT LIMITED |
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BALANCE SHEET AS AT JUNE
30, 2007 |
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(Rs in '000) |
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2007 |
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2006 |
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ASSETS |
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NON-CURRENT
ASSETS |
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Property, plant and equipment |
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20,318,908 |
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19,165,108 |
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Long term security deposits |
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2,175 |
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2,175 |
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20,321,083 |
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19,167,283 |
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CURRENT ASSETS |
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Stores and spares |
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1,993,573 |
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1,267,000 |
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Stock-in-trade |
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676,256 |
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431,418 |
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Trade debts - unsecured considered good |
476,667 |
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98,389 |
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Loans and advances |
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241,948 |
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202,238 |
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Trade deposits and short term prepayments |
9,661 |
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285,121 |
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Other receivables |
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176,546 |
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83,912 |
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Tax refunds due from government |
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538,812 |
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- |
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Taxation - net |
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50,057 |
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23,661 |
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Cash and bank balances |
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1,239,158 |
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2,063,755 |
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5,402,678 |
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4,455,494 |
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TOTAL ASSETS |
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25,723,761 |
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23,622,777 |
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EQUITY AND
LIABILITIES |
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SHARE CAPITAL AND
RESERVES |
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Share capital |
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2,633,750 |
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2,633,750 |
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Reserves |
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6,719,800 |
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4,435,883 |
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9,353,550 |
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7,069,633 |
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NON-CURRENT
LIABILITIES |
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Long term finance |
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8,329,012 |
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10,156,595 |
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Long term deposits |
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25,863 |
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27,269 |
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Deferred liabilities |
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147,245 |
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181,623 |
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Deferred taxation |
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1,515,535 |
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1,435,622 |
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10,017,655 |
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11,801,109 |
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CURRENT
LIABILITIES |
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Trade and other payables |
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1,546,699 |
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1,451,086 |
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Accrued mark-up |
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326,181 |
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190,130 |
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Short term borrowings |
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2,864,397 |
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645,872 |
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Current portion of long term finance |
1,615,152 |
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2,382,576 |
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Sales tax payable |
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127 |
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82,371 |
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6,352,556 |
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4,752,035 |
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CONTINGENCIES
AND COMMITMENTS |
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25,723,761 |
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23,622,777 |
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LUCKY CEMENT LIMITED |
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PROFIT AND LOSS ACCOUNT |
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FOR THE YEAR ENDED JUNE
30, 2007 |
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(Rs in '000) |
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2007 |
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2006 |
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Turnover |
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12,521,861 |
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8,054,101 |
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Cost of sales |
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8,846,708 |
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5,073,797 |
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Gross profit |
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3,675,153 |
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2,980,304 |
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Distribution costs |
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497,729 |
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103,489 |
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Administrative expenses |
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111,311 |
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106,740 |
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609,040 |
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210,229 |
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3,066,113 |
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2,770,075 |
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Finance costs |
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862,847 |
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82,809 |
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Other operating income |
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(629,289) |
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(203) |
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Other charges |
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142,204 |
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134,493 |
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375,762 |
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217,099 |
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Profit before
taxation |
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2,690,351 |
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2,552,976 |
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Taxation - current |
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63,146 |
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39,923 |
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- deferred |
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79,913 |
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577,103 |
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143,059 |
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617,026 |
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Profit after
taxation |
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2,547,292 |
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1,935,950 |
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(Rupees) |
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Basic and diluted earnings per share |
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-
before taxation |
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10.21 |
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9.69 |
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-
after taxation |
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9.67 |
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7.35 |
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RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)