The Bell about – LPCL: CY12 earnings at PKR1.13 – Elixir Securities Limited

Karachi, March 22, 2013 (PPI-OT): CY12 EPS at PKR1.13; DPS at PKR0.30: Lafarge Pakistan Cement Ltd (LPCL) announced its CY12 results on 20 th March 2013.

According to Elixir Securities Limited the company posted EPS of PKR1.13 from loss of PKR0.09 in CY11. EPS for 4QCY12 came in at PKR0.55, up 2.4x YoY. The increase in profitability was primarily fuelled by higher top line (up 23% YoY) owing to higher cement prices during the period. A tax reversal of PKR337mn in the last quarter fuelled up CY12 earnings.

LPCLNo. of Shares 1313mn
PKRmnCY11ACY12AYoY4QCY11A4QCY12AYoY
Net Sales

7,804

9,624

23%

2,204

2,618

19%

Cost of Sales

6,149

6,489

6%

1,529

1,648

8%

Gross Profit

1,656

3,135

89%

676

970

44%

Distribution cost

734

853

16%

207

277

34%

Finance Cost

1,064

1,053

-1%

290

228

-22%

Other Operating Exp.

4

87 21

39%

0

87

27036%

Other income

56

12

-79%

40

5

-88%

Profit before tax

-91

1,154

NA

218

383

76%

Taxation

27

-334

-1337%

8

-337

-4313%

Profit after Taxation

-118

1,488

-1357%

210

720

243%

EPS (PKR)

-0.09

1.13

NA

0.16

0.55

244%

DPS (PKR)

0.30

NA

0.30

NA

Source: Elixir Research, Company Accounts

Tax reversal in 4Q boosted earnings: LPCL posted stellar earnings growth in 4QCY12, with its after tax profit coming in at PKR 720mn, as against PKR768mn in 9MCY12. This exponential increase in after tax earnings was primarily due to a tax rebate of PKR337mn booked during the quarter. Its before tax profit for 4QCY12 clocked in at PKR383mn, up 76% YoY.

Gross margin improvement: LPCL’s gross margin improved to 37% in 4QCY12 as against 30% during 4QCY11. Its gross margin for CY12 came in at 33% (from 21% in CY11) owing to higher cement prices and depressed cost of sales especially during 2HCY12. Cement prices increased by around 10% in CY12 whereas international coal prices decreased by 21% during CY12.

Estimates raised; maintain hold: Elixir Securities Limited has raised Elixir Securities Limited estimates on account of strong CY12 results. However, the stock offers CY13 dividend yield of 5% and trades at a CY13 PER of 5.4x. Hold!

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