Cement: LAFARGE PAKISTAN CEMENT LIMITED - Analysis of Financial Statements - Financial Year 2007 - 3 Q 2010.

Lafarge Pakistan Cement Limited was incorporated in Pakistan on 23rd May 1993 as a private limited company and subsequently converted into a public limited company on 18th October 1994 under the Companies Ordinance, 1984.

It is listed on all the three stock exchanges of Pakistan. The principal activity of the company is to manufacture and sale of cement. It is a subsidiary of "Pakistan Cement Holding Limited", a company incorporated in the British Virgin Islands, whereas its ultimate parent company is Lafarge S.A., France.

Cement industry in FY10:

Due to adverse economic and political conditions in the country, the overall performance of the cement sector was very sluggish in FY10. However, Pakistan's cement industry continued to perform well in term of profitability and interest coverage. Despite the worse economic conditions around the globe, the local cement industry witnessed good net margins while the sector also benefited from its superior quality and brand image in the international market as visible from it high retention prices. Attock Cement was the best performer in the sector with excellent net margins and interest coverage results. Other performers include Lucky Cement (13% net margin) in the south region, while in the north region Fauji Cement Company Limited (FCCL) and DG Khan Cement (DGKC) topped the charts.

Revenues fell in FY10 due to a decline in prices by 18%. However, total revenues declined by only 14% due to a rise in the volume sales of 9% in FY10. Rising prices of gas as well as the power tariff added fuel to the rising costs in the industry. The coal prices declined by 16% providing the sector a huge sigh of relief. However the fall in total revenues also had huge impact on the profitability margins as total gross profit fell by almost 49% while the average gross profit margins was 17% compared to the 29% same period last year. Domestic sales in the sector fell by around 16% and exports fell by 21%. The capacity utilisation of this …