Lucky Cement Reports Strong Earnings Growth Amid Expanding Operations

Karachi: Lucky Cement Limited (LUCK) presented its third-quarter fiscal year 2025 financial results and strategic outlook in a corporate briefing, revealing significant earnings growth driven by increased income. The company reported a stand-alone profit after tax of Rs13.5 billion for the third quarter, a 2.7-fold increase year-on-year, primarily attributed to higher other income. Consolidated earnings rose to Rs17.9 billion, marking a 15% year-on-year increase, and bringing the nine-month fiscal year 2025 consolidated earnings to Rs57.3 billion, up 13% from the previous year.

The company achieved a top-line revenue of Rs94.5 billion in the first nine months of fiscal year 2025 on a stand-alone basis, reflecting an 8% year-on-year increase. This growth was largely supported by a 10% rise in dispatch volumes, despite a 9% decline in local dispatches. A significant 76% increase in exports from the southern region offset the domestic decline. Lucky Cement’s domestic market share remained stable at 16.5% during this period.

Looking ahead, the management anticipates stable or slightly increased domestic demand in fiscal year 2026. The company’s ongoing mining project through National Resource Limited, in which it holds a 33% stake, is progressing with initial encouraging results from scout drilling. However, a comprehensive feasibility study is required to fully assess the mine’s long-term potential, expected to take an additional three to four years.

Equity investments and joint ventures have maintained strong performance, with foreign cement operations on schedule and the automotive sector benefiting from a broader market recovery. Conversely, the mobile phone segment faced challenges, experiencing an 11% year-on-year decline following the imposition of GST in the fiscal year 2025 budget.

The company reported that the expansion of the Iraq cement line, with a capacity of 1.782 million tons per annum, is proceeding on schedule for a 2025 completion. Additionally, a new clinker line is slated to commence operations within two weeks.

In domestic operations, average retention prices for the quarter were reported at Rs14,500 per ton, while the average effective coal cost was Rs35,000 per ton. Export prices for clinker and cement stood at US$30 and US$40 per ton, respectively.

Regarding royalty concerns in Khyber Pakhtunkhwa, management clarified that they do not anticipate the Punjab limestone royalty structure, which sets the rate at 6% of the ex-factory price, to apply, as it would result in royalty costs exceeding the limestone’s value.