Pakistan Cement - LUCK, DGKC & PIOC 1QFY24 Result Previews, (AKD Daily Oct 27, 2023)
AKD Daily
Pakistan Cement - LUCK, DGKC & PIOC 1QFY24 Result Previews
LUCK- 1QFY24 standalone earnings to clock in at PkR18.3/sh: LUCK is expected to announce its 1QFY24 earnings on Monday, wherein we expect company to post unconsolidated PAT of PkR5.7bn (EPS: PkR18.3) vs. earnings of PkR8.3/12.3/sh in 4QFY23/SPLY, an increase of 121%/49% QoQ/YoY. This surge is credited to sales volume growth and higher other income, boosted by dividend income, especially from LCI (PkR1.7bn). Topline of the company is expected to clock in at PkR30.5bn, an increase of 20%/54% QoQ/YoY, respectively. Increase in the topline is majorly driven by growth in sales volume (up 15%QoQ), and a rise in retention price. Other income is expected to soar to PkR3.1bn (up 91%QoQ), majorly due to substantial dividend from LCI after their disinvestment in Morinaga. Furthermore, finance cost is expected to reach PkR458mn, an increase of 23%QoQ, owing to higher borrowing in the previous quarter and an uptick in effective interest rates. Finally, consolidated earnings of the company is expected to reach PkR63.2/sh (up 68%/2.6x QoQ/YoY), largely due to a significant contribution from LEPCL (Lucky Electric Power Company Ltd) with expected quarterly earnings of PkR10.2bn, a load factor of 64% for the quarter and a normalized availability factor of 97%.
DGKC—EPS is expected to clock in at PkR2.69 for 1QFY24: DGKC's board is set to announce their 1QFY24 result on Saturday, wherein the company is expected to post earnings of PkR1.2bn (PkR2.69/sh) vs. loss of PkR5.7bn (PkR13.12/sh) in the preceding quarter, where the prior loss was majorly due to gross margin contraction and impact of retrospective implementation of super tax. Topline for the quarter is expected to clock in at PkR16.3bn vs. PkR16.9bn in the quarter before, a decline of 4%QoQ. This decline is attributable to a 12%QoQ drop in sales volume, totaling 1.17mn tons compared to 1.33mn tons in the previous quarter. Gross margins are expected to improve to 19.7% vs. 10.7%/15.3% in 4QFY23/SPLY, primarily due to an increase in retention prices and a decline in coal prices (contributes ~35% of power mix). The company's finance cost is expected to increase by 5.9%QoQ, reaching PkR2.0bn, due to overall higher effective interest rates.
PIOC—EPS of PkR3.96 is expected in 1QFY24: PIOC is expected to announce its 1QFY24 results on Oct 30th, where earnings of PkR900mn (EPS: PkR3.96) is expected compared to loss of PkR100mn (LPS: Pk0.44). This noteworthy quarterly upswing in earnings is primarily attributed to improved gross margins and the absence of the supertax impact on earnings and deferred taxation. Topline is expected to clock in at PkR8.9bn vs. PkR8.4bn in 4QFY23, an increase of 5%QoQ, driven by a roughly 7%QoQ uptick in the retention price that offset the impact of a marginal decline in sales volume (down 2%QoQ). Gross margins are expected to settle at 29.3% from 26.6% in the previous quarter, primarily due to elevated retention price and a decline in the fuel and power cost amidst lower coal prices. Moreover, finance cost is expected to clock in at PkR993mn, up 66%/2% QoQ/YoY, due to increase in the interest rates during the period.
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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