Pakistan's Lucky Cement Third-Quarter Profit Declines 42% on Lower Prices
Lucky Cement Ltd., Pakistan’s biggest producer of the building material, said third-quarter profit fell 42 percent because of lower prices.
Net income declined to 652.9 million rupees ($7.78 million), or 2.02 rupees a share, in the three months ended March 31 from 1.13 billion rupees, or 3.51 rupees, a year earlier, the Karachi-based cement maker said today in a statement to the stock exchange. Sales fell to 7.17 billion rupees from 7.84 billion rupees a year ago.
“Competition between the producers led prices down, leading to a decline in sales,” said Ahmed Rajani, research analyst at IGI Finex Securities Ltd., in Karachi, who has a “hold” recommendation for the stock. “Costs also rose because of higher fuel prices.”
Rival cement makers cut prices to increase market share after the Competition Commission of Pakistan, a government agency regulating anti-competitive practices, fined producers of the building material in 2008 for manipulating prices through a cartel.
The average price of a 50 kilogram bag of cement fell to 275 rupees from 330 rupees a year ago, according to IGI Finex Securities.
Lucky Cement’s shares, which more than doubled last year, fell 2 percent to 78.95 rupees as of 1:19 p.m. local time close on the Karachi Stock Exchange. The stock rose 19 percent this year.
The company’s net profit during the nine months ended March 31, fell to 2.56 billion rupees, from 3.07 billion rupees a year ago.
To contact the reporter on this story: Farhan Sharif in Karachi, Pakistan firstname.lastname@example.org.