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LUCK Preview: Odds are certainly not in favor

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July 26, 2019 (MLN): The Board of Directors of Lucky Cement Limited is scheduled to meet on Saturday i.e. July 27, 2019, to discuss and announce the financial results for the year ended June 31, 2019.

Going by the predictions made by various brokerage houses, the Profit after Tax (PAT) and Earning per share (EPS) of the company are expected to decline by approximately 16%, as compared to the PAT of Rs. 12.2 billion in last year.

Financial projections for the year ended June 30, 2019 (PKR Million)

Research House

PAT

EPS

% Change

BIPL Securities

10,505

32.5

-14%

Ismail Iqbal Securities

10,230

31.64

-16%

Next Capital

10,240

31.67

-16%

Taurus Securities

10,194

31.52

-16.4%

Darson Securities

10,490

32.44

-14%

 

The persistent devaluation in local currency has led to a significant increase in coal prices, which is likely to push up the company’s cost of production as well. Unfortunately, the surge in production cost is expected to have a negative impact on the company’s profits, especially since it has very limited scope to pass on the impact on its consumers.

On top of that, the company’s PAT is expected to be further led down by an increase in distribution cost, owing to the increase in exports of both cement and clinker. A higher Federal Excise Duty (FED) is just another factor behind the probable decline in earnings.

The company is expected to report a lower sales figure, on account of lower cement dispatches during the year coupled with unchanged prices.

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Posted on: 2019-07-26T17:31:00+05:00

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