Karachi, January 26, 2024 – Lucky Cement Limited (LUCK) has stunned the market by announcing its 2QFY24 financial results, revealing an unconsolidated Profit After Tax (PAT) of PKR 6.8 billion, translating to Earnings Per Share (EPS) of PKR 22.9.
This impressive performance marks a substantial 107% Year-on-Year (YoY) increase from PKR 3.3 billion (EPS: PKR 10.2) in the Same Period Last Year (SPLY), exceeding market expectations.
Analysts at Ismail Iqbal Securities attribute the stellar performance primarily to dividend income derived from Lucky Motor Corporation (LMC), adding a lucrative dimension to Lucky Cement’s overall revenue stream.
During the second quarter, the company’s topline exhibited a robust growth of 19% YoY, reaching PKR 30.5 billion compared to PKR 25.6 billion in SPLY. This surge is credited to higher retention prices maintained throughout the period, contributing significantly to Lucky Cement’s enhanced financial position.
Despite the stellar performance, gross margins experienced a slight dip, settling at 36%, down by 0.8% Quarter-on-Quarter (QoQ). This marginal decline is attributed to the escalating freight costs and an increased ratio of exports.
Distribution and Administrative expenses witnessed notable upticks, escalating by 55% and 13% YoY, respectively. The surge is largely attributed to inflationary pressures, underscoring the challenges companies face in a dynamic economic landscape.
Lucky Cement’s other income exhibited a substantial increase, recording PKR 3.0 billion compared to PKR 0.8 billion in SPLY. The notable boost is credited to a dividend income of PKR 1.4 billion from Lucky Motors, further enhancing the company’s overall profitability.
However, finance costs witnessed an upward trajectory, rising by 18% YoY and 11% QoQ. This increase is primarily attributed to higher interest rates and an uptick in short-term borrowings, reflecting the broader economic trends impacting financial expenses.
The effective tax rate for the period stands at 33%, marginally higher than the 30.5% recorded in SPLY. On a QoQ basis, the effective tax rate is reported at 33.8%, highlighting the consistent tax contribution by Lucky Cement.
Lucky Cement’s exceptional performance in the second quarter underscores its resilience and strategic financial management amidst a complex economic environment. The company’s ability to surpass expectations is not only a testament to its operational efficiency but also reflects positively on its diversified revenue streams.
As Lucky Cement continues to navigate through economic challenges, the focus remains on sustaining growth, managing costs, and exploring opportunities for further diversification. Investors and industry stakeholders are keenly watching the company’s trajectory, anticipating continued resilience and adaptability in the face of evolving market dynamics.
With this remarkable financial performance, Lucky Cement sets a strong precedent for other players in the industry, showcasing the potential for strategic decision-making and prudent financial management to drive success even in challenging times.
