AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Lucky Cement (LUCK) shared significant developments during its FY25 analyst briefing, highlighting strides in renewable energy integration and export growth. The company announced the commissioning of a 28.8MW wind power project at its South Karachi plant, enhancing its renewable energy capacity to approximately 160MW. This expansion means that over 55% of the power required for cement operations now comes from renewable sources.
In addition to wind power, Lucky Cement has implemented a battery energy system intended to optimize these renewable sources, with an anticipated payback period of four to five years. The remaining 45% of the company’s power needs will be met by the national grid.
Cement dispatches saw an 8% year-on-year rise in FY25, primarily driven by a surge in exports. Lucky Cement maintained its status as Pakistan’s largest cement exporter, with African markets being the primary destination for its products.
The average domestic retention price for cement in FY25 was reported at Rs15.5-16.0k per ton, while export prices for cement and clinker were US$41/ton and US$31/ton, respectively. The company noted an improvement in gross margins, supported by stable coal prices and the addition of the new wind power project.
The South plant continues to depend entirely on imported coal, costing approximately Rs33k/ton, whereas the North plant’s fuel mix consists of 75-80% local coal supplemented with Afghan coal at an average cost of Rs38k/ton. A rise in other income was attributed to returns on surplus cash held for future strategic initiatives and investments.
The management discussed potential capital allocation, with an investment in Pakistan International Airlines (PIA) currently under due diligence. The company’s foreign operations also demonstrated strong performance, with Iraq-based plants operating at 95% utilization and Congo-based plants at 85%.
LEPCL, part of the company’s portfolio, is mainly using imported coal, but with SECMC Phase III expected to come online, local coal availability is anticipated to improve. This shift is expected to lower costs and boost profitability for LEPCL by FY26.
A 5:1 stock split announced in FY25 resulted in 65% of shareholders holding a minimum of 500 shares. The management forecasts a 5% growth in cement demand, alongside a positive outlook for Lucky Motors due to improving economic conditions and increased auto demand. Currently, Lucky Cement is trading at a projected FY26E/27F PE of 7.4/6.3x.