IGI Securities Limited – Day Break (28-01-2020)

Karachi, January 28, 2020 (PPI-OT): Cement – LUCK: 2QFY20E EPS to decline by 59%YoY to PKR 3.82, 1HFY20 comes to PKR 6.77

Lucky Cement Limited’s (LUCK) board meeting is scheduled on 29th Jan-19 to announce financial result for 2QFY20, wherein we expect the company to post unconsolidated earnings of PKR 1.23bn, down by 59%YoY, compared to PKR 3.01bn in the same period last year.

Moreover, we expect LUCK to continue enjoying a lower effective tax rate of around 10%, thanks to available tax credits. No dividends are expected along with the result

2QFY20E earnings to drop by 59%YoY to PKR 3.82/share; 1HFY20 EPS to close at PKR 6.77
Lucky Cement Limited’s (LUCK) board meeting is scheduled on 29th Jan-19 to announce financial result for 2QFY20, wherein we expect the company to post unconsolidated earnings of PKR 1.23bn (EPS: PKR 3.82), down by 59%YoY, compared to PKR 3.01bn (EPS: PKR 9.30) in the same period last year. This will bring 1HFY20E earnings to PKR 2.19bn (EPS: PKR 6.77), down by 60%YoY, as against PKR 5.50bn (EPS: PKR 17.01) reported in the similar period of the preceding year.

Net sales of the Company during 2QFY20E are expected to decline materially by 13%YoY, courtesy lower dispatches made and depressed retention prices during the quarter as against the comparative period. Similarly, gross profits of the Company are also expected to recede by 53%YoY with further injury anticipated from enhanced cost structure stemming from increased gas prices, incremental depreciation of new plant and enhanced raw material prices by the government, despite lower coal prices. Moreover, we expect LUCK to continue enjoying a lower effective tax rate of around 10%, thanks to available tax credits. No dividends are expected along with the result

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