By: Aba Ali Habib Securities Pvt Ltd
We preview the financial result of Lucky Cement (LUCK) scheduled to be announced on October 30, 2014. We foresee the company to post net earnings of PKR 2.92bn (EPS: PKR 9.03) in 1QFY15, a 15% growth from PKR 2.54bn (EPS: PKR 7.87) in 1QFY14. We expect this growth to primarily come from a 10%YoY increase in volumetric sales and favorable cement prices
The company is expected to post significant growth of 17%YoY in its topline mainly arises from 10%YoY growth in volumetric sales (particularly 17% from local) and 7%YoY rise in retention prices. As a result of that topline will settle at PKR 10.91bn in 1QFY15 against PKR 9.32bn in 1QFY14.
Despite hefty increase in gas prices, the COGS/bag is expected to increase marginally by 7%YoY to PKR 184 against PKR 172 recorded in 1QFY14. This is because, the fall in international coal prices has fairly neutralize the effect of rise in gas prices.
Finance cost of the company is expected to remain insignificant due to the absence of long-term debt.
On QoQ, company’s net profit will drop by 8%QoQ due to relatively lower volumetric sales in 1QFY15.