Lucky Cement Ltd. (LUCK) held a corporate briefing yesterday to discuss its FY25 financial results and future outlook. Here are the key highlights from the event, as reported by AKD Research: The company reported standalone earnings of PKR 33.1 billion (EPS: PKR 22.6), compared to PKR 28.1 billion (EPS: PKR 18.9) in the same period last year (SPLY), marking an increase of 18% year-on-year (YoY). This improvement was mainly attributed to higher dividend income and increased sales volume.
– Consolidated earnings rose by 17% YoY to PKR 84.5 billion (EPS: PKR 52.5), driven primarily by improvements across all subsidiaries and joint ventures.
– LUCK’s local cement offtakes declined by 6% YoY to 5.9 million tons in FY25, down from 6.3 million tons in the SPLY. The market share also slightly decreased to 16.0% from 16.4% in the SPLY.
– However, export offtakes surged by 53% YoY to 3.4 million tons, up from 2.2 million tons in the SPLY, driven by improved global demand from the Africa region. As a result, the company’s export market share increased to 36.6% from 30.7% in the SPLY.
– On foreign cement operations, plants in Iraq and the Democratic Republic of Congo are operating at utilization levels of 95% and 85%, respectively.
– Local average retention prices during the outgoing year stood at PKR 15.5k per ton, with northern prices around PKR 16.0k and southern prices about PKR 15.0k. For exports, cement and clinker prices were at US$41 per ton and US$31 per ton, respectively.
– Management reported that the weighted average coal prices were PKR 33,000 per ton during FY25. In terms of the coal mix, the south plant predominantly relies on imported coal, while the north plant is more reliant on local coal (approximately 80%), along with a small proportion of Afghan coal (around 20%).
– During the outgoing year, a 28.8MW captive wind power project was successfully commissioned at the South plant, allowing it to meet 55% of its power requirements through renewable sources. Additionally, management informed that battery storage has been installed at the South plant.
– Regarding National Resources Ltd (NRL), management indicated that scout drilling has been performed, but an additional 3-4 years will be required for a detailed feasibility study.
– Management anticipates a 5% YoY growth in domestic offtakes during FY26. The surge observed in the first two months of FY26 does not fully reflect the true market conditions, as it is partly due to a low base from the same period last year, attributed to increased Federal Excise Duty rates.
– Furthermore, management does not foresee any substantial demand increase stemming from the recent flooding.
– With the completion of Phase 3 of SECMC, management expects an improvement in the LEPCL’s merit order due to the availability of local coal, as the plant currently relies on imported coal.
– Management indicated that the outlook for the auto and mobile phone segments is gradually improving. With the introduction of newer vehicle models, operational optimization, and localization strategies, margins are expected to remain protected. In the mobile segment, the focus is on affordable smartphones in response to the rising demand for cost-effective devices.
– Regarding the acquisition of the national flag carrier, Pakistan International Airlines (PIA), management stated they are currently undergoing due diligence.
– We maintain a “BUY” stance on the stock, with a target price of PKR 558.6 per share by June 2026. Our enthusiasm for LUCK stems from three main factors: i) improvement in core margins, ii) increased dividends from the power segment, and iii) anticipated recovery in cyclical segments that will benefit its subsidiaries.
[Source: AKD Research](https://research.akdsl.com/638933038114989129.pdf)
