April 27 (Bloomberg) -- Lucky Cement Ltd., Pakistan’s biggest maker of the building material, said third-quarter profit rose 70.4 percent on lower production costs and higher overseas demand.

Net income rose to 1.13 billion rupees ($14 million), or 3.51 rupees a share, in the three months ended March 31 from 665.3 million rupees, or 2.53 rupees, a year earlier, the Karachi-based cement maker said in a statement to the stock exchange today. Sales rose to 6.7 billion rupees from 4.66 billion rupees.

Production costs fell because coal, which fuels the plant, was less costly,” said Atif Zafar, research analyst at JS Global Capital Ltd., in Karachi, who has a “buy” recommendation on the stock. “Even though construction in the Middle East slowed, the lack of cement manufacturers there meant there was still buying from Pakistan.

Higher cement prices also helped increase profits, Zafar said. The average price for a bag of cement in Pakistan was about 320 rupees in the three months ended March 31, compared with about 220 rupees a bag a year earlier, according to JS Global.

Cement demand is expected to rise in the fiscal year starting July 1, after international donors pledged more than $5 billion to Pakistan earlier this month, the company said in the statement. The government is likely to spend more on infrastructure, raising cement demand, it said.

Lucky Cement’s revenue from exports rose to 4.1 billion rupees in the three-month period, from 2.77 billion rupees a year ago, the statement said.

Lucky Cement’s shares, which have risen 84.5 percent this year, fell 5 percent to 57.68 rupees at the 3:30 p.m. local time close on the Karachi Stock Exchange today.

Net profit in the first nine months ended March 31 rose to 3.1 billion rupees from 2.01 billion rupees, the Karachi-based cement maker said in a statement to the stock exchange today. Sales rose 19.1 billion rupees in the nine-month period, from 11.9 billion rupees a year ago.

To contact the reporter on this story: Farhan Sharif in Karachi at fsharif2@bloomberg.net

Last Updated: April 27, 2009 05:54 EDT