Lucky Cement (LUCK): 3QFY19 EPS Rs10.7, -14% YoY (+22% QoQ), (Above expectations)
- LUCK reported 3QFY19 consolidated earnings of Rs3.5bn (EPS Rs10.7), down 14% YoY (+22% QoQ), which was slightly better than our estimates mainly on the back of lower effective tax rate.
- Net sales were up 11% YoY during the outgoing quarter thanks to 17% YoY higher revenues from its subsidiary ICI Pakistan.
- Cement segment sales remained almost flat despite 7% decline in total dispatches thanks to 9% increase in avg. net retention prices to Rs324/bag.
- Local sales witnessed a significant decline, down 22% YoY in 3QFY19, as infrastructure activities were affected by slowdown in overall economy. However, exports showed an impressive growth of 99% YoY thanks to clinker sales.
- Consolidated gross margins contracted by 3ppts to 23% YoY during the outgoing quarter as higher energy prices and inflationary pressure increased input costs. Resultantly, cement margins shrank by 3ppts to 31% while ICI’s margins contracted by 1.26ppts to 17.7%.
- We flag 1) price weakening, 2) lower than anticipated local demand, 3) unanticipated increase in gas and coal prices, 4) delay in its upcoming ventures as key risk for the company.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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