Pakistan Cement_Profitability to decline sequentially for 4QFY21, (AKD Daily, Aug 03, 2021)
AKD Daily
Pakistan Cement: Profitability to decline sequentially for 4QFY21
- AKD Cement universe is expected to post PAT of PkR6.8bn for 4QFY21 against LAT of PkR1.5bn reported in 4QFY20 while sequentially, profitability is expected to decline by 49%QoQ as soaring coal prices dent the margins.
- For FY21, PAT is expected to stand at PkR30.3bn against loss after tax of PkR4.5bn as fortunes of the industry completely changed after prices improved post conclusion of price competition while demand was also stimulated by various incentives provided to construction sector.
- Usage of pet coke for its third line is expected to partially shield MLCF from the impact of soaring coal prices as company’s gross margins are only expected to decline by 2ppts against 6ppts of the industry while LUCK and DGKC are expected to witness biggest drop in profitability sequentially due to high base.
- We continue to like MLCF (TP: PkR80.1/sh) and LUCK (TP: PkR1,289.2/sh) from the AKD cement universe with the former being one of the lowest cost producers implying lower sensitivity to retail price variations, while latter’s cost efficiencies coupled with diversified investments make it a safe play..
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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