In a notice to the exchange today, Lucky Cement (LUCK) announced that, during its emergent board meeting held on September 6, 2023, it had decided to invest in renewable power projects to increase the contribution of renewable energy to the power mix. The estimated cost of upcoming projects is expected to be around Rs11bn, as per notice. Although the company has not disclosed the exact debt and equity mix, we believe a significant portion will be financed through equity as the company currently holds Rs26bn in cash and cash equivalents as of June 2023. These solar power projects are in addition to 25MW and 34MW, commissioned recently at the Karachi and Pezu plant.
The details of the projects are as follows:
28.8MW Captive Wind Power Project & 6.3MW Solar Power Project at the Karachi site
LUCK has announced a 28.8MW Captive Wind Power and 6.3MW Solar Power Project at the Karachi plant. The captive wind power is expected to be complete by the end of FY24, while 3.3MW is scheduled to be completed by 3QFY24. This would have an annualised positive impact of Rs0.83 per share on the bottom line, assuming 20% efficiency, as per our working.
2.5MW Solar capacity Pezu plant
LUCK has also announced a 2.5MW Solar power project at the Pezu plant. The project is expected to be completed by 3QFY24. We estimate an annualised positive impact of Rs0.26 per share, per our work.
Evaluation of participation in the equity of Lucky Core Ventures (LCV)
The board of directors has also authorised the evaluation of the involvement in the equity of Lucky Core Ventures (LCV) and other companies of the Younus Brothers Group. LCV is a wholly owned subsidiary of Lucky Core Industries (LCI). LCV has been set up to act as a holding company to undertake future growth projects of LCI. To recall, LCV, on May 02, 2023, published a public announcement of intention to acquire approximately 75.01% shareholding of Lotte Chemical Pakistan Limited (LOTCHEM). This deal is still pending. LUCK’s participation in the equity of LCV is subject to completing satisfactory due diligence and obtaining regulatory approval.
Courtesy – Topline Pakistan Research