Karachi, October 27, 2021 (PPI-OT): LUCK and PIOC Previews for 1QFY22

We present earnings estimates for Lucky Cement Company Limited (LUCK) and Pioneer Cement Company Limited (PIOC) ahead of the 1QFY22 result announcements. We expect flattish margins on a QoQ basis for the two companies discussed mainly due to higher coal costs.

Result Previews

Lucky Cement Company Ltd. (LUCK): The Board of Directors of LUCK is scheduled to meet on 27th October, 2021 to discuss its 1QFY22 financial result. We expect the company to post stand-alone earnings of Rs2,343mn in the quarter which translates to an EPS of Rs7.25, versus an EPS of Rs6.89/share during SPLY. We expect LUCK to post a consolidated EPS of ~Rs19 in the first quarter where significant growth contribution is expected to step from ICI, which had a one-off gain of Rs1.85bn on account of re-measurement of previously held interest in NutriCo Pakistan (Pvt) Ltd. Gross margins are expected to register a decline of 1ppt YoY while margins on a QoQ basis are expected to remain flat.

Pioneer Cement Company Limited (PIOC): We preview 1QFY22 EPS of PIOC wherein we expect the company to post earnings of Rs602mn which translates to an EPS of Rs2.65 for 1QFY22 vs a loss of Rs39mn in SPLY. The bottom-line is expected to turn green this period mainly due to higher retention prices (37% YoY increase) and savings from its captive coal power plant that commenced after 1QFY21. However, earnings on a QoQ basis are expected to be lower owing to higher finance cost and other operating expenses.