KARACHI, November 12 2024: Lucky Cement Ltd (LUCK) held a corporate briefing, sharing insights into its current performance and future strategies. Here are the main takeaways:
- Energy Mix
Lucky Cement has a renewable energy capacity of 100 MW, contributing 55% of its energy requirements. The remaining 45% is generated through captive power sources. - Cement Industry Dispatches
In the first four months of FY25, local cement dispatches declined by 15% year-over-year (YoY) due to higher prices and inflation, impacting demand. - Market Share
The company’s domestic market share for 1QFY25 was 16.9%, a slight decrease from 17.5% in the same period last year. - Foreign Operations
Overseas, capacity utilization in Iraq and Congo remained high at around 90%, driven by solid demand due to favourable economic conditions. - Coal Prices
Lucky Cement used a mix of imported and domestic coal at an average cost of PKR 38,000 per ton. Afghan coal prices are projected to fall by PKR 5,000-6,000 per ton due to reduced border taxes and royalties. - Cement Prices
Retention prices for domestic cement are approximately PKR 15,500-16,000 per ton, with export prices remaining stable from the previous quarter. - Other Income
Other income grew by 25% YoY to PKR 3.9 billion in 1QFY25, driven primarily by dividends from Lucky Core Industries (PKR 1.7 billion), Yunus Energy Limited (PKR 0.3 billion), and income from mutual fund investments. - Mining Project
The mining project is two stages away from a feasibility study, with full materialization expected in 2-3 years. - Lucky Electric Receivables
Receivables for Lucky Electric currently amount to 4-5 months of sales. - Cement Expansion
Given the current industry utilization of around 50%, management does not foresee new expansions within the next couple of years. - Auto Sales
Lucky Cement management indicated that the auto sector is showing signs of recovery. - Investment Outlook
The company, with ample cash reserves, remains open to investment opportunities across various sectors. - Cement Demand Forecast
Management is optimistic that easing inflation and lower interest rates will drive an increase in local cement dispatches in the near future.
This update reflects Lucky Cement’s ongoing strategies and outlook for growth amidst challenging market conditions. The company’s focus on diverse income streams and efficient operations, particularly in energy, highlights its resilience and preparedness for future expansion.
