Lucky Cement Limited (LUCK) is set to unveil its 1QFY22 financial result tomorrow, whereby the company is expected to post unconsolidated earnings of PKR 3,000mn (EPS: PKR 9.28) against PKR 2,226mn (EPS: PKR 6.89) last year and PKR 2,383mn (EPS: PKR 7.37) in 4QFY21.

The 35% YoY surge in profitability was owed to a 16% jump in company topline amid significant hike in retention prices in north and south tagged with 3% uptick in domestic offtake. Albeit, with cost pressure emanating from higher coal prices, electricity tariff and packaging costs, coupled with volumetric decline (-7% YoY) margins are projected to come down to 25.3% vis-à-vis 27.9% last year. However, a 2x growth in other income, on the back of recognition of dividend income from ICI (PKR 20.00/share), should support bottom-line.

On a QoQ basis, margins are forecast to come down (4QFY21: 26.8%) due PKR depreciation and higher coal prices, which should offset the impact of cement price hikes.

Courtesy – AHL Research