Karachi: LUCK: Lower freight cost prop up earnings during 2QFY12
According to Elixir Securities Limited,
|Key Financials||Outstanding shares:323mn|
|SG and A||1,227||940||-23%||1,974||1,982||0%|
|Source: Elixir Research, Company Accounts|
Lower freight costs support margins
Average net retention prices realized by Lucky Cement (LUCK) during 2QFY12 stood at PKR5,509/ton, up 21% YoY, which would likely have been the result of rise in domestic prices as export prices remained weak during the quarter. 19% YoY rise in COGS/ton (excluding depreciation) to PKR3,195/ton partially offset retention price increase as Gross Profit/ton (ex. depreciation) stood at PKR2,314/ton, up 24% YoY.
EBITDA margins registered a healthy growth of 66% YoY during 2QFY12 to PKR1,656/ton due to lower distribution cost. Distribution cost fell 28% YoY to PKR573/ton likely due to lower share of CnF based export contracts.
Market share dropped by 1pp QoQ
Overall dispatches of LUCK increased by 1.1% YoY during 2QFY12 to 1.43mn tons, mainly driven by 3.1% YoY growth in local dispatches amid 1.8% YoY drop in exports. During 2QFY12, overall market share of LUCK decreased by 1.0pp QoQ to 18%, mainly due to 0.8pp drop in local market share. Export market share increased by a mere 0.2pp QoQ to 26.7%.