Lucky Core Industries (LCI) held its corporate briefing session to discuss its 1HFY26 financial results.

• The Company’s 1HFY26 PAT stood at PKR 4.84bn (EPS: PKR 10.5), down 23% YoY, primarily due to weak soda ash and polyester performance, lower investment income amid falling interest rates, and the bargain purchase gain recognised in the prior year on the Pfizer acquisition. Stand-alone revenue fell 9% YoY, EBIT declined 17% YoY to PKR 7.74bn, while consolidated earnings stood at PKR 4.6bn, down 28% YoY. The company maintained its 50% payout, declaring PKR 5.25/share.
• Soda ash segment operating profit declined 21% YoY (exports declined 63% YoY), amid weak export prices and competition from China and Turkey. Overall volumes fell, though local volumes grew 10% YoY, with average realised price at PKR 88,000/ton. Import share has risen to around 10% of the market (from 4–5% historically), with global prices at USD 180–190/ton. Recently, NTC implied anti-dumping duties on countries like Turkey (3.5-5%) and Kenya (12.5%). The soda ash plant is operating at 75% utilization, runs primarily on coal (98–99%), and the 200k TPA expansion remains in design phase, to be executed upon demand recovery.
• Polyester segment operating profit plunged 79% YoY, due to cheaper imports and weak demand, with sales volumes down 15% YoY. Market size stands at 520k tons, with import penetration rising from 20% two years ago to 38% last year, and expected to exceed 45% this year, keeping margins under pressure. Operations use a gas-heavy fuel mix (50% natural gas, 50% RLNG), where the rate of Natural Gas is PKR 2,300 per MMBTU and RLNG is PKR 11 per MMBTU, while production is electricity-intensive at 0.5 kWh/kg.
• Pharmaceuticals remained the key growth driver, with revenue up 10% YoY and operating profit up 17% YoY, supported by 8–15% price increases and improved margins (43%). Volume growth was modest at 2%, affected by weaker Afghanistan exports and tender timing. The Pfizer portfolio contributed PKR 4.5bn in 1HFY26 (vs. PKR 3.2bn last year), with plant utilization above ~60% and ample capacity for growth. Management expects 10–12% normalized growth, while Morinaga volumes have also improved following local manufacturing. The management also communicated that 65% of the pharma portfolio is non-essential, whereas 35% is essential.
• Animal health operating profit increased 16% YoY, driven by livestock demand and seasonal factors. A ~PKR 800mn greenfield veterinary facility is expected to come online by end-FY26, with projected 35–40% gross margins.
• Chemicals & agri operating profit declined 21% YoY, due to disrupted crop cycles and weaker agri demand, though chemicals and masterbatch volumes recorded modest growth.
• Management expects near-term pressure in soda ash and polyester amid global oversupply, while pharma and animal health remain growth drivers. Afghanistan-related export disruptions are expected to normalize over time, with alternative markets being explored.

Courtesy – AHL Research