Pakistan Cement: Downtrend to persist in 3QFY19
- AKD Cement universe is expected to post a 34%YoY decline in profitability for 3QFY19 as higher energy/fuel cost weigh on margins despite 15%YoY higher retail cement prices. On QoQ basis, profitability is expected to decrease by 30% on the back of lower margins and dispatches.
- For 9MFY19, 29%YoY decline in earnings is expected with finance cost being a drag as increasing debt to finance capacity additions and working capital needs will take the interest cover down to 5.7x vs. 22.6x in 9MFY18.
- After commissioning of line-II, CHCC is going to witness significant burden of increased finance cost and depreciation resulting in company witnessing a 78/71% QoQ/YoY decline in profitability. However, we highlight a possibility of negative effective tax rate for 3QFY19 as company is liable for tax credit under section 65B.
- FCCL is expected to outperform peers on YoY basis for 9MFY19 (up 19%YoY), courtesy a low base in 9MFY18 due to company’s line-II not being operational.
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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