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Karachi, Luck Cement Ltd. (LUCK) conducted its corporate briefing to provide investors with an overview of its financial performance for the first nine months of fiscal year 2024 (9MFY24) and offered insights into the company’s future outlook.
According to AKD Securities Limited, the key highlights of the briefing include: LUCK reported unconsolidated earnings of PkR18.6 billion (EPS: PkR63.6) in 9MFY23, showing a substantial increase of 67% year-on-year (YoY) compared to PkR11.1 billion (EPS: PkR38.0) in the same period last year (SPLY). Consolidated earnings for the period stood at PkR173.8 per share, reflecting a 38% YoY increase.
Local sales experienced a 6% YoY increase, reaching 4.85 million tons during 9MFY24, leading to the company’s local market share rising to 16.5% from 15% in SPLY. Exports surged by 68% YoY to 1.45 million tons during the same period, mainly attributed to reduced coal prices and improved economic conditions in importing countries like Sri Lanka.
Management attributed the quarter-on-quarter contraction in gross margins in 3QFY24 to higher fixed costs amid lower offtakes and the implementation of axle load regulations. Retention prices remained flat at around PkR13.5-14k/ton for domestic sales and US$38-40/ton for bagged cement and US$30/ton for loose cement for exports.
Regarding the coal mix, the South plant relies entirely on international coal priced at around US$100-110/ton, while the North plant uses 80% local coal and the rest Afghan coal, with a weighted average coal price of approximately PkR33-34k/ton.
Management expects renewables to contribute over 50% to the total power mix after the commissioning of ongoing projects. Looking ahead, they anticipate domestic cement sales growth to remain negative 2% to flat for the current fiscal year, with next year’s demand depending on macroeconomic factors.
Additionally, Luck Electric Power Company Ltd (LEPCL) has outstanding receivables equivalent to 4-5 months of invoicing (~PkR30 billion), consistent since the start of its operations.
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