LUCK_3QFY21 unconsolidated EPS clocked in at PkR22.1 – (Above expectations), (AKD, Off the Analyst's Desk, April 28, 2021)
AKD, Off the Analyst's Desk
LUCK: 3QFY21 unconsolidated EPS clocked in at PkR22.1 – (Above expectations)
- Lucky Cement Limited (LUCK) announced results for 9MFY21 where company posted unconsolidated PAT of PkR11.7bn (EPS: PkR36.14), up by 4.0xYoY. For 3QFY21, unconsolidated PAT stood at PkR7.2bn (EPS: PkR22.10) which again posted impressive growth of 7.2x/3.1x YoY/QoQ. The result was above our expectations.
- The main surprise was other income for the quarter standing at PkR4.4bn on unconsolidated basis against our expectation of PkR1.1bn as company's subsidiary, Lucky Motor Corporations paid a dividend of PkR2.85bn during the quarter. To note, this was the first ever dividend announced by subsidiary and comes on the back of impressive growth being witnessed by the subsidiary.
- Gross margins of the company clocked in at 36% for the quarter against our expectations of 30% where we believe lower cost inventory of coal played its part while on YoY/QoQ basis, gross margins improved by 24/7ppts. For 9MFY21, gross margins stand at 31% against 14% for 9MFY20.
- LUCK's topline for 3QFY21 stood at PkR17bn, up 52/8% YoY/QoQ as dual impact of improvement in prices and dispatches sets in. For 9MFY21, topline now stands at PkR47bn, up 45%YoY.
- On consolidated basis, profitability for 3QFY21 stood at PkR9bn (EPS: PkR24.31) against PkR2.7bn (EPS: PkR4.45). The significant improvement points towards phenomenal performance of Lucky Motor Corporation coupled with impressive performance of other subsidiaries namely ICI Pakistan and LCL investments holding.
- Apprising on the ongoing projects, company has set commissioning of 3.2mn tons expansion in Pezu at Dec'22 where project activities have already commenced. Clarity has also emerged on commissioning of LEPL which is now expected to commence operations towards mid of 1QFY22.
- We continue to highlight LUCK as our preferred play from the sector with our TP of PkR1289.2/sh providing an upside of 48.5%.
AKD Research
Lucky Cement is a cement manufacturing and distribution company which is based in Pakistan. Co. is engaged in the manufacture and sale of Ordinary Portland, Sulphate Resistant, and Slag Cement. Co.'s brand names included Lucky Cement, Lucky Star, Lucky Gold, Chairman, and Lucky Sulphate Resistant Cement. Co. maintains production facilities in Pezu (Production capacity: 13,000 tons per day) as well as in Karachi (Production capacity: 8,000 tons per day). In addition, Co. is engaged in developing export markets for bulk loose cement from Pakistan to the Gulf Countries, African Markets, and Far East Region including Nepal & Sri Lanka.
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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