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Devastating news for solar users under new policy

Islamabad has officially slashed solar buyback rates by over 60 percent. As per credible reports, the federal government has also eliminated the process of net billing and reduced the buyback rate to a measly 10 rupees per unit.

This decision was taken by officials at a Cabinet meeting of the Economic Coordination Committee (ECC) to stifle the growth of solar net metering connections. This is because net metering has been proven to cause significant financial strain on the national grid, resulting in higher electricity bills for non-net meter users.

The Power division reported how solar panel owners with net meters are inducing a 9 paisa per unit increase in average electricity costs. While net meter owners are often met with zero or very low electricity bills, the national grid and its users have to collectively bear a cost of 101 billion rupees.

If left unchecked, this financial burden could have ballooned to a staggering 545 billion rupees by 2034. A financial burden of such a magnitude would have resulted in non-net meter users bearing an additional cost of 3.6 rupees per unit. As such, authorities decided to take action before the situation deteriorated any further.

Finance Minister Muhammad Aurangzeb presided over the ECC meeting during which power companies were directed to sell grid electricity at 42 rupees per unit while charging 48 rupees per unit for ‘peak’ electricity. These prices are exclusive of duties and taxes and vary as per consumption.

However, reports have revealed that the policy is applicable only to new net-metering users. Moreover, new users will not be allowed to install solar capacity in excess of their approved usage. Previously, users were allowed to install solar capacity that exceeded their approved load by 50 percent, but this rate has now been revised downward to just 10 percent.

Users who already have net meters may not feel the impact of the policy change immediately, as reports claim that they will fall under this framework only when their seven-year contracts end. However, many believe that net-meter users have been handed the short end of the stick.

A senior official reportedly outlined how, after taxes and duties, net meter users will be forced to purchase electricity at an extortionate 70 rupees per unit during peak hours – a stark contrast with the new buyback rate of 10 rupees per unit. Another alternative that analysts have highlighted for net meter owners is to purchase high-capacity batteries and sever ties with the national grid.

Currently, taxes have not been levied on off-grid solar installations. However, many fear that it is only a matter of time before these installations are in the crosshairs of the Federal Board of Revenue (FBR).

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Lucky Cement installled a 28.8MW captive wind power project at South plant

Lucky Cement Ltd. (LUCK) held its corporate briefing on Feb 21 to discuss 1HFY25 financial results and future outlook.
Key highlights from the event are as follows:
To recall, company reported standalone earnings of PkR13.8bn (EPS: PkR47.2), largely flat YoY compared to PkR13.7bn (EPS: PkR46.8) in SPLY.
Company’s consolidated earnings increased by 11%YoY to PkR39.4bn (EPS: PkR134.4), from PkR35.3bn (EPS: PkR120.6) in SPLY, mainly due to improved performance across all subsidiaries.
Local cement offtakes declined by 14%YoY to 3.0mn tons in 1HFY25, reducing the company’s market share to 16.4% from 17.1% in SPLY. Management attributed this drop to intensified market competition amid lower utilization levels.
Export offtakes surged by 92%YoY to 1.8mn tons from 0.9mn tons in SPLY, increasing the company’s export market share to 38% from 26% in SPLY. Key export destinations include Africa, Sri Lanka, and Bangladesh.
Local avg. retention prices stood at PkR16k/ton during 1HFY25. Prices have recently come under pressure due to higher supply and subdued demand, with the North region witnessing a decline of PkR50/bag lately. On the export front, retention prices are PkR9k/ton for Afghanistan, while sea route prices are ~US$41/ton for cement and US$30/ton for clinker.
Management guided that weighted avg. coal prices were PkR37k/ton in 1QFY25, which eased to PkR35k/ton in 2QFY25. Moving forward, management foresees coal prices remaining largely stable around the 2QFY25 levels.
Regarding coal mix, South plant predominantly relies on imported coal, whereas the North plant is more tilted towards local and Afghan coal.
During the half-year period, a 28.8MW captive wind power project at South plant was successfully commissioned. Following its commissioning, 55% of the power requirement can be met through renewables, including WHR, solar, and wind.
Looking ahead, management anticipates a delayed recovery in cement demand, expecting FY25 demand growth to remain negative. However, they anticipate local cement prices to improve, especially in the North, with a recovery in demand.
Management further guided that the chemical and auto segments are expected to track the overall growth of the economy.
On the foreign cement operations, all plants in Iraq & Congo are operating at 90-95% utilization levels with optimum efficiency.
Lucky Electric Power Company Ltd. (LEPCL) maintained 100% plant availability during 1HFY25 and aims to improve its merit order and reduce electricity costs with the commencement of Thar coal supply next year.
Management apprised that the recently approved 5-for-1 stock split aims to enhance liquidity in the market and attract retail investors by making the stock price more accessible.
We maintain our ‘BUY’ stance on LUCK with a Dec’25 target price of PkR1,965/sh. Our liking on the scrip is supported by: i) improving market share given recent expansion, ii) higher gross margins driven by optimal coal and power mix, and iii) expected recovery in portfolio businesses alongside broader economic improvement.
Courtesy – AKD Research

Pakistan’s cement exports witness 25% growth in seven months

The exports of cement witnessed an increase of 24.85% during the first seven months of the fiscal year 2024-25, as against the exports of the corresponding period of last year.

According to the latest data released by the Pakistan Bureau of Statistics (PBS), cement exports were recorded at $188.091 million during July-January FY2024-25 against exports of $150.653 million during July-January FY2023-24.

In terms of quantity, the cement export also rose by 35.34 percent from 3,896,244 metric tons to 5,273,028 metric tons, the data revealed.

Meanwhile, on a year-on-year basis, cement exports witnessed an increase of 40 percent during January 2025 as compared to the same month of last year.

The exports of cement from the country during January 2025 were recorded at US $20.619 million against the exports of US $14.728 million in January 2024.

On a month-on-month basis, cement exports however decreased by 35.36 percent during January 2025 when compared to the exports of US $31.898 million in December 2024, the PBS data revealed.

Lafarge Srbija acquires Jazovnik stone quarry

Cement manufacturer Lafarge Srbija said it has acquired Jazovnik stone quarry in Serbia’s northwestern town of Vladimirci.
Lafarge Srbija acquires Jazovnik stone quarry

The quarry, located some 30 km from Larfarge’s planned cement factory in Belgrade’s Obrenovac municipality, will allow for the establishment of the entire logistics chain for the development of the company’s new industrial complex, Lafarge said in a press release earlier this month.

Financial terms of the transaction were not disclosed.

The quarry has an annual capacity of 350,000 tons of stone ore, according to the website of Jazonik’s former owner, local stone materials producer Tribex.

In August last year, Serbia’s government said Lafarge plans to invest 110 million euro ($115 million) in the first phase of opening the cement factory in Obrenovac.

Lafarge Srbija, part of Swiss building materials manufacturer Holcim Group, already operates a cement factory in Serbia’s northwestern city of Beocin and several concrete plants across the country.

Lucky Cement diversifies mining business

The Competition Commission of Pakistan (CCP) has recently approved two mergers (cement and fertiliser firms) in the mining of copper and minerals in the Balochistan province of Pakistan. CCP approved the acquisition of a cumulative 66.66 per cent shareholding in National Resources (Private) Ltd by two publicly-listed companies: Lucky Cement Ltd and Fatima Fertilizer Co Ltd.

National Resources (Pvt) Ltd is engaged in mining, surveying, extracting, excavating, mining and boring minerals. Its primary purpose is the potential development of the mineral sector in Balochistan.

Lucky Cement sent a pre-merger application to acquire 33.33 per cent of National Resources’ shares from YB Pakistan Ltd. Similarly, Fatima Fertilizer Co Ltd, engaged in the manufacturing, producing, buying, selling, importing, and exporting of fertilisers and chemicals, sent a pre-merger application to acquire 33.33 per cent shareholding in National Resources from Reliance Commodities (Pvt) Ltd.

“Lucky Cement and Fatima Fertilizer’s interest in investing in the mining sector signifies a positive shift towards economic diversification and growth, promising to unlock new opportunities and drive innovation,” the CCP spokesperson said.

In a parallel move, Lucky Cement’s board of directors informed the Pakistan Stock Exchange (PSX) recently that it has decided to invest up to PKR1bn (US$3.59m) in National Resources (Pvt) Ltd.