Lucky Cement Limited (LUCK) is set to unveil its 2QFY22 financial result on Monday (31st January, 2022), whereby the company is expected to post unconsolidated earnings of PKR 3,656mn (EPS: PKR 11.31) against PKR 2,315mn (EPS: PKR 7.16) last year and PKR 3,284mn (EPS: PKR 10.15) in 1QFY22. The 58% YoY surge in profitability is expected on the back of a 16% YoY growth in topline led by hike in retention prices in North and South which offset the 12% dip in offtake to 2,247k tons in 2QFY22.

Albeit, with cost pressure emanating from higher coal prices, PKR depreciation and augmented packaging costs, coupled with volumetric decline (-14% in local and 9% in exports market YoY) margins are projected to come down to 24.6% vis-à-vis 29.2% last year. On a QoQ basis, margins are forecast to come down (2QFY22: 27.3%) due to PKR depreciation and higher coal prices, which should offset the impact of cement price hikes. This will take the 1HFY22 earnings to PKR 6,940mn (EPS: PKR 21.46), up by 53% YoY led by 17% growth in revenue which is forecast to offset the impact of lower margins (25.9% vs. 28.5% in SPLY) amid higher coal prices, PKR depreciation and augmented packaging costs.

Courtesy – AHL Research