LUCK_2QFY23 Result Review,(AKD Off the Analyst's Desk Jan 30, 2023)
AKD, Off the Analyst's Desk
LUCK: 2QFY23 Result Review
Lucky Cement Limited (LUCK) announced 2QFY23 result where company posted unconsolidated PAT of PkR3.3bn (EPS: PkR10.2), ↓15/↑32% QoQ/YoY. The result was slightly below our expectations as cost of sales clocked in on the higher side where we believe higher than expected power costs played a role owing to the gas supply cut to industry and increase in prices of Furnace Oil.
- Net Sales clocked in at PkR25.6bn for 2QFY23, up by 30/24% QoQ/YoY because of the improvement in the local offtakes (up by 34% to 1.7mn tons against 1.3mn tons in 1QFY23). However, on the yearly basis, increase in cement prices (up by ~40% in 2QFY23 vs SPLY) mainly attributed to increase in topline amidst lower dispatches.
- Gross margins clocked in at 25.4% against 30.6/27.3% for 1QFY23/SPLY, we believe drop in the margins are majorly because of increase in the power cost (Gas supply cut in winters and increase in prices of Furnace Oil pushed companies to meet their power requirement from Grid, pushing their cost upward).
- Other income decreased by 58%QoQ where low dividend from subsidiaries was the main reason as company only received PkR0.1bn in 2QFY23 against PkR1.5bn in 1QFY23 (PkR0.8/0.7bn from LCI/LMC).
- On consolidated accounts, company posted PAT of PkR10.5bn (PS: PkR32.51), up by 93/62% QoQ/YoY. This increase in mainly attributed by profitability of LEPCL (92% of plant availability factor to capacity in 2QFY23 vs 78% in last quarter) and improved profitability of foreign cement operations, partially offsetting the low profits from LCI and LMC.
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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