Pakistan Cements_4QFY18E Result Previews
Commencing today, the AKD Cement Universe begins release of 4QFY18E results; first up being LUCK (Jul 31'18). As a group, we expect the AKD Cement Universe to post combined NPAT of PkR8.90bn in 4QFY18E as compared to PkR7.64bn in 4QFY17 - earnings increase of 16%YoY. This growth however is specious, being a function of lower effective tax rate of 10% vs. 30% in 4QFY17 (booking of tax credits on DGKC & CHCC new plants), as on a pre-tax basis profits are expected to go down by 10%YoY. In full year FY18E, our AKD Cement Universe pre-tax earnings are expected to decline by 20%YoY owing to significant 8.2pptsYoY fall in Gross margins to 30.4% (avg. coal prices up 20%YoY coupled with 4%YoY decline in local cement prices – FED adjusted), despite 14%YoY increase in total cement dispatches to 45.89mn tons during FY18. While short term outlook for sector seems positive in response to recent currency recovery, staggered build-up in selected names is recommended, where we have already incorporated much of these adverse development with regards to currency depreciation (currency parity stands at avg. PkR131.75/US$ for FY19F) and higher coal prices.
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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