LAHORE - Lucky Cement announced its 1HFY11 results on Monday, registering profits of Rs 1.5 b (EPS of Rs4.52) versus Rs1.9b (EPS of Rs5.90) in 1HFY10 a decline of 23 percent annually. Though the companys retention per bag increased by 13 percent, its revenues declined by 1 percent to Rs12.0b primarily because of lower dispatches during the period. Local cement dispatches of the company increased by 13 percent to 1.5mn tons while exports sales fell to 1.3m tons, down 30 percent. Hence, total dispatches stood at 2.8mn tons, down 12 percent YoY. Moreover, COGS/ton rose by 20 percent due to higher coal prices, resulting in gross margin falling to 33 percent from 37.3 percent last year. Experts said that the double digit decline in earnings is primarily due to higher cost pressures subsequently reducing gross margins by 440bps YoY to 32.9 percent compared to 37.3 percent in 1HFY10. Furthermore volumetric sales also reduced by 12 percent YoY to 2.8mn tons in 1HFY11 compared to 3.2mn ton on account of reduced exports to GCC. Oversupply scenario in the GCC dented companys export by 30 percent YoY to 1.29mn which was partially mitigated by improved domestic sales, up 13 percent YoY to 1.5mn tons. Net sales for the company in outgoing period remained almost flat to Rs12bn compared to Rs12.1bn in 1HFY10 as higher retention prices has offset the decline in volumetric sales.