Lucky Cement Limited (LUCK) is scheduled to announce its 3QFY22 financial result on Apr 27th, 2022, whereby we expect the company to post a profit after tax (PAT) of PKR 4,654mn (EPS: PKR 14.39) compared to PKR 7,146mn (EPS: PKR 22.10) during the same period last year.

Sales are expected to grow by 24% YoY to PKR 21bn owed to a significant escalation in retention prices, which offset a 10% volumetric decline. Albeit, with coal prices showing a significant upswing coupled with PKR depreciation, we believe the company’s margins would not sustain the levels witnessed last year and arrive at 23.2% vs 35.9% last year. On a QoQ basis, margins are expected to remain stable amid price hikes and the use of Afghan coal by the company in the north, which should keep cost pressures in check.

We do highlight that 6x increase in other income is expected in 3Q on the back of dividend income from ICI and Lucky Motors. This will take the bottom-line for 9MFY22 to PKR 10,429mn (EPS: PKR 32.25) vs. PKR 11,688mn (EPS: PKR 36.14) last year, down by 11% YoY given weaker margins (24.1% vis-à-vis 31.2% in SPLY) due to reasons as mentioned earlier.

Courtesy – AHL Research