KARACHI, Oct 29 (Focus Pakistan) - Lucky Cement Limited squeezed a 17.2% jump in standalone profit out of a cement market that has struggled for years, it also plans to push its domestic capacity to 18.8 million tons a year.
The quarter produced two very different scorecards. Lucky Cement’s standalone profit rose to PKR 17.1 billion in July-September from PKR 14.6 billion a year earlier, helped by stronger cement sales and dividends from its subsidiaries and associate. Earnings per share climbed to PKR 11.69 from PKR 9.98.
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The wider group moved the other way. Profit for shareholders of the conglomerate, whose interests run from Kia cars and soda ash to a coal-fired power plant, slipped 1.7% to PKR 21.6 billion. Consolidated EPS fell to PKR 14.76 from PKR 15.01.
The board met in Karachi on October 28 and recommended no cash dividend, bonus or right shares. Lucky made no first-quarter payout last year either.
Beating the market at home and abroad
Lucky Cement sold 1.83 million tons of cement at home, a 13% increase against industry growth of 8.7%. Its domestic market share climbed to 16.8% from 16.1%, according to the filing.
Exports offered the starker contrast. Bagged cement shipments across Pakistan crashed 48.5%. Lucky grew its own by 13%, lifting its share of the country’s bagged cement exports to 70.5% from 32.1%. Its clinker exports, on the other hand, dropped 24%.
Costs bit hard. Cost of sales jumped 26.1% to PKR 25.9 billion as raw material, packing and fuel bills rose, and the directors pinned part of the pressure on supply disruption from the Middle East conflict. Gross margin narrowed to 36.8% from 39.2%.
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Subsidiaries plugged the hole. Lucky collected PKR 9 billion in dividends from its subsidiaries and associate, against PKR 7.6 billion a year earlier.
Cash tells a tighter story. Cash generated from operations at the standalone company halved to PKR 10.8 billion from PKR 21.2 billion, while tax and levy payments more than tripled to PKR 4.25 billion.
Where the group lost ground
Lucky Cement ’s share of profit from joint ventures and associates fell 24.8% to PKR 4.1 billion. That line includes its cement operations in Iraq and the Democratic Republic of Congo, and the directors linked a slight sales decline in both markets to Middle East instability.
Lucky Core Industries lifted turnover 4% to PKR 29.9 billion, but its operating result shrank 25% to PKR 2.8 billion. Soda ash profit halved under pressure from cheaper Chinese imports and higher energy costs.
The automobile arm took a tax shock. The government raised sales tax on hybrid and plug-in hybrid vehicles from 8.5% to between 18% and 25% from July 1, and volumes in that segment fell. Smartphone imports dropped 56% by volume as global memory chip prices climbed.
The 18.8 million-ton bet
The board approved projects adding 3.20 million tons a year of brownfield capacity at the Karachi plant. Together with a grinding unit now under installation, the projects will lift Karachi’s installed capacity to 8.55 million tons. Lucky targets commercial operations by December 2027. The filing does not disclose the cost.
With the Pezu plant in Khyber Pakhtunkhwa, Lucky projects its installed capacity in Pakistan at 18.80 million tons once the projects finish. Adding Iraq and Congo takes the total to 26.65 million tons.
The board also cleared 22.5 MW of new wind turbines and a 10 MW waste heat recovery plant at Karachi, plus a 15 MW solar plant and a 15 MW battery storage system at Pezu. Once complete, Lucky says, renewables will meet roughly 60% of the energy needs of its cement operations, the new Karachi line included.
The timing carries risk. Inflation averaged 10.2% during the quarter, and the State Bank raised its policy rate by 50 basis points to 12% after the quarter closed, the directors noted. They said Lucky would keep choosing margin over volume in export markets.
