LUCK held its corporate briefing on April 28 to discuss its 3QFY25 operational and financial performance. The company posted 3QFY25 NPAT of PKR17.9bn (EPS: PKR12.25), up 15% YoY but down 16% QoQ. This result takes 9MFY25 NPAT to PKR27.3bn, up a sharp 47% YoY.
Key takeaways from the briefing:
Update on local cement operations:
§ LUCK recorded domestic sales of 4.5mn MT in 9MFY25, down 8.2% YoY, driven by weak local industry offtakes (down 6.5% YoY) this has resulted in a 0.3ppt decline in market share to 16.4%.
§ Export volumes surged 67% YoY to 2.5mn MT in 9MFY25, outperforming overall industry growth of 27.5%, resulting in market share of exports increasing by 10.5ppt to 39%. Management highlighted that export profitability has improved and shared that the company has recently commenced exports to US.
§ Local cement retention price during the quarter was recorded at PKR14,500/ton.
§ Management indicated that cement demand in FY26 is expected to remain stable or moderately positive. Regarding prices, they noted that lower inflation and interest rates will gradually support a pickup in demand, leading to an improvement in prices.
§ LUCK’s average coal cost in 3Q was PKR35,000/ton. The southern plant relies on imported coal, while the northern plant uses a mix of Afghan and local coal.
§ Management noted that linking royalty to goods prices raises legal concerns, as royalty is a provincial matter while goods pricing is federal. They added that this would inflate mineral costs above fair value, and therefore expect no major change in current royalty rates.
Other Items:
§ Regarding LUCK’s mining venture (NRL), management stated that feasibility studies are still pending, which will determine the project’s scale and required capital expenditure. Several milestones remain before reaching a concrete understanding of the potential of the discovered mines.
§ Auto business utilization has improved, while mobile phone demand declined by c.11% following the GST levy introduced in the FY25 budget.
§ Government reforms have helped reduce circular debt buildup; however, management stated that LEPCL still has some outstanding dues, and the company is engaged with the government to have them released.
Courtesy- IMS Research
