Lucky Cement Ltd. (LUCK) reported its highest-ever quarterly standalone earnings of PkR9.5bn (EPS: PkR32.3), taking full-year standalone earnings to PkR28.1bn (EPS: PkR95.9) – also the highest-ever. The result exceeded our expectations, primarily due to higher-than-expected other income, likely stemming from increased dividend income. On a consolidated basis, earnings for the quarter clocked in at PkR49.9/sh, largely in line with expectations. The company announced a final dividend of PkR15/sh, along with the result.

·         Revenue  for the quarter reached PkR27.9bn, up 10%YoY from PkR25.5bn in SPLY. Where a 10% rise on average drove the increase. Cement prices and a 2.4x annual increase in exports.

·         Gross margins improved to 32.4% compared to 27.7% in SPLY, mainly attributed to higher cement prices and a ~16% annual reduction in weighted avg. Coal prices.

·         Other income increased substantially to PkR7.5bn (vs. PkR2.3bn expected), likely due to higher dividend income. We await clarity on the source of dividend income.

·         On consolidated basis, full-year earnings accumulated to PkR65.6bn (EPS: PkR223.7), up 34%YoY from PkR48.8bn (EPS: PkR166.4) in FY23. The said annual increase was driven by doubling core income YoY and increased income from LEPCL and foreign cement operations (Iraq and DR Congo).

·         We maintain a ‘Buy’ stance on LUCK with a Jun’25 target price of PkR1,172/sh.

Courtesy – AKD Research