Lucky Cement moves Rs116bn into ‘separate capital reserves’

KARACHI: Lucky Cement Limited has reclassified revenue reserves of Rs116 billion into separate capital reserves to “more accurately reflect the nature of the reserves”, a statement said on Thursday.

The move will make the funds un-distributable by way of dividends.

The company shared the development through a notice to the Pakistan Stock Exchange (PSX).

Out of the reclassified Rs116 billion, Rs40 billion will be reclassified as capital reserve against long-term investments, another Rs40 billion as capital reserves against capacity expansions, and Rs36 billion as capital redemption reserve, according to the notice.

The board of directors of Lucky Cement held a meeting to discuss the company’s expansion and diversification strategy over the years.

“The company has continued with its expansion and diversification strategy and has made significant investments which have enhanced enterprise value of the shareholders. In addition, the company has carried out buy-back of its shares in the past and continues to do the same at present,” Faisal Mahmood, GM Finance and Company Secretary, Lucky Cement, informed the PSX about the board meeting.

The board noted that because of the above mentioned reasons, the general reserves of the company had been utilised and were not entirely available for distribution as dividend.

“The board, therefore, decided to reclassify a sum of PKR 116 billion from the revenue reserves to separate capital reserves (un-distributable by way of dividend) to more accurately reflect the nature of these reserves.”

The notice also informed that the board decided not to proceed with the increase in the authorised share capital of the company and further not to alter the Articles of Association of the company as refereed therein.

“The board has withdrawn all the agenda items and has decided to cancel the extra-ordinary general meeting [EOGM] which was scheduled to be held on June 26, 2023. Accordingly, the book closure announced for the EOGM from June 19, 2023 to June 26, 2023, also stands cancelled,” Mahmood informed.

In another notice to the PSX, Lucky Cement announced back-back of 641, 800 shares at weighted average price/share of Rs514.41.

In July-March period of the current fiscal year, the company recorded 83 percent increase in its profit as compared to the same period the previous year. It made a profit of Rs48.5 billion against Rs26.5 billion in 11MFY23. The earnings per share were recorded at Rs115.24 against Rs64.07 in the said period.

Lucky Cement Limited was incorporated in Pakistan on September 18, 1993 under the Companies Ordinance, 1984 (now the Companies Act, 2017). The principal activity of the company is manufacturing and marketing of cement.

On Thursday, the company’s scrip at the bourse closed at Rs513.16, up 0.08 percent or Rs0.40.