In 9MFY25, Lucky Cement Limited reported a consolidated net profit of PKR 63.14 billion (EPS: PKR 39.12), reflecting a 13% YoY increase compared to PKR 55.65 billion (EPS: PKR 34.10) in SPLY. The growth in profitability was primarily attributed to higher export sales and positive contributions across all segments. Gross sales rose by 9% YoY to PKR 332.81 billion from PKR 306.31 billion, driven mainly by export growth.
Volumetric dispatches increased by 10%, led by a surge in export volumes. Pre-tax operating profit increased by 14% YoY, reaching PKR 79.38 billion. Other income also improved, supported by dividend inflows and interest income from surplus mutual fund investments.
Management is accumulating cash reserves for contingency and growth opportunities, with PKR 3–4 billion currently deployed in ongoing projects. Export dispatches rose sharply to 2.5 MT in 9MFY25. Export market share reached 61% in 3QFY25, with sales to markets such as the USA. Export pricing improved, with clinker prices at USD 30/ton and cement at USD 40/ton. Conversely, domestic cement sales fell by 9.1% YoY to 4.5MT, although LUCK maintained its domestic market share at 16.9%. The decline in local sales aligned with industry trends amid lower government spending, elevated interest rates, and higher inflation. Management also reported strong performance in foreign cement operations and highlighted plans to enhance clinker and cement capacities in Iraq, with clinker operations expected to come online in the coming weeks and cement production later this year. Standalone revenue grew by 8.2% YoY to PKR 94.5 billion from PKR 87.4 billion, while standalone EBITDA increased by 4.8% YoY to PKR 28.4 billion.
Standalone net profit rose significantly by 46.6% to PKR 27.3 billion (EPS: PKR 18.67). On the cost side, the South and North plants operated on a blend of imported and local coal, with an average coal cost of PKR 35,000/ton during 3QFY25. Average retention prices remained stable at PKR 14,500/ton. While the South plant is operating at full capacity, the North plant is running below 50% due to lower domestic demand and inventory buildup.
Management noted that the commodity-pegged royalty system is unsustainable and does not anticipate its extension to other provinces. Regarding investments, LUCK’s exploratory activities at National Resources (Private) Limited near Reko Diq remain in early stages, with encouraging initial drilling results but final feasibility studies expected to take 3–4 years. Management stressed that project viability would depend heavily on depth, quality, and extraction costs. During 9MFY25, the 5:1 stock split was completed, with trading on the adjusted shares commencing today.
On the energy front, a 28.8MW wind power project was commissioned in 1QFY25, increasing total renewable capacity to 100MW. Renewables now supply 55% of LUCK’s total energy requirements. Plans are underway to enhance battery storage at the Karachi plant, following a successful installation at the North plant. In other sectors, the automobile demand recorded a 55% YoY growth, while mobile phones demand declined by 11% YoY due to the GST levy. Management is actively negotiating with the government for resolution of outstanding receivables.
Management views the impact of the global tariff war as neutral for Pakistan, potentially benefiting fuel import bills. LUCK’s extensive dealership network provides an advantage over Chinese EV brands with limited distribution reach.
The group’s automotive models target a particlular market segment. Looking ahead, LUCK anticipates that lower interest rates, easing inflation, PKR stability, and reduced energy costs will support segment performance. Cement demand is expected to remain stable to slightly positive in the next year, contingent on a recovery in government spending.
Management expects soft oil and commodity prices to persist with some volatility over the next 3–6 months. Overall, the management maintains a stable outlook with a slightly positive outlook for next year
Important Disclosures
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