Lucky Core profit drops 28% in 9MFY26

April 28, 2026 (MLN): Lucky Core Industries Limited (PSX: LCI) reported a 27.58% year-on-year contraction in profit after taxation for the nine months ended March 31, 2026, recorded Rs6.50bn compared to Rs8.98bn in the corresponding period last year.

The company's basic and diluted earnings per share (EPS) declined 27.61% to Rs14.08, down from Rs19.45 in 9MFY25, reflecting meaningful value erosion for shareholders during the period.

The primary driver of this profit contraction was a softening in top-line performance that, combined with relatively contained cost reductions, compressed gross profitability and exerted sustained downward pressure on the broader earnings base.

LCI's net turnover posted a 7.24% year-on-year decline, falling to Rs85.39bn from Rs92.05bn in the prior year period.

Concurrently, the cost of sales moderated at a lesser pace of 5.78%, settling at Rs66.96bn, insufficient to fully offset the revenue shortfall.

This cost stickiness relative to the revenue compression resulted in gross profit registering a 12.18% contraction, settling at Rs18.42bn, down from Rs20.98bn in the corresponding period last year.

Selling and distribution expenses declined by 6.08% to Rs5.18bn, while administration and general expenses expanded by a notable 15.83% to Rs2.05bn.

The combined effect of lower gross profit and the elevated administrative cost base resulted in the operating result declining by 18.24% to Rs11.20bn, compared to Rs13.69bn in the corresponding period of the prior year.

Below the operating line, finance costs moderated marginally by 1.67% to Rs1.73bn from Rs1.75bn, providing limited relief on the debt-servicing front.

Exchange losses widened by 40.68% to Rs40.05m from Rs28.47m, adding incremental pressure.

Workers' profit participation fund and workers' welfare fund charges declined by 27.31% and 27.99% to Rs277.08m and Rs194.50m respectively, broadly showing the lower profitability base.

Other charges, however, surged by a sharp 90.59% to Rs189.30m from Rs99.32m, pointing to heightened operational costs.

Notably, a one-off gain on bargain purchase of Rs292.56m that had benefited the prior year period was entirely absent in 9MFY26, representing a meaningful base-effect headwind.

Other income, a significant line item for LCI, contracted sharply by 41.91% to Rs1.64bn from Rs2.82bn, amplifying the pressure on pre-tax earnings and emerging as a key drag on the overall result.

The company's share of profit from associate, while modest in absolute terms, delivered an exceptional 506.61% surge to Rs175.15m, up from Rs28.87m in 9MFY25, providing a notable positive offset within an otherwise challenging earnings environment.

Following these contributions, profit before final taxes and income tax stood at Rs10.58bn, a 26.00% contraction from the Rs14.30bn recorded in 9MFY25.

Final taxes escalated sharply by 626.97% to Rs92.01m from Rs12.66m in the prior year, adding further drag to pre-income-tax earnings.

After accounting for final taxes, profit before income tax came in at Rs10.49bn, representing a 26.58% year-on-year decline from Rs14.29bn reported in the corresponding period last year.

The company benefited from a commensurately lower income tax charge of Rs3.99bn, a 24.88% reduction from Rs5.31bn in the prior year, partially cushioning the bottom-line impact and reflecting the lower taxable profit base with a broadly contained effective tax rate relative to the scale of earnings compression.

After accounting for total taxation, Lucky Core Industries Limited closed the nine-month period with a profit for the period of Rs6.50bn, representing a 27.58% contraction over the Rs8.98bn reported in the corresponding period of last year.

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