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Lucky Cement

Lucky Cement has actively participated in various environment projects. Company always ensures environment preservation as a front line demeanor in adopting all the possible means for environment protection and has been taking various steps to ensure minimal dust and gaseous emissions.

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

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.

Pakistan, China sign agreement on waste heat recovery power plant’s project

An agreement on a renovation project of a waste heat recovery power plant was signed between China Sinoma Energy Conservation Limited (Sinoma EC) and Lucky Cement, according to a report published by the Gwadar Pro on Wednesday.

Under the agreement, the generating capacity of the two power stations utilising waste heat is expected to increase by about 4MW after the transformation.

The agreement came into effect after a contract entered between the two sides on a 7500t/d supporting power station project with waste heat of cement in late March this year.

Sinoma EC, a patent-holding company specialized in energy-saving and emission-reduction, started cooperation with Lucky Cement in 2008.

Since then, it has undertaken several projects, including the Pezu Lines AB and CD waste heat recovery power plant with a generating capacity of 10 MW respectively, the 15 MW Karachi Line EFG power plant with waste heat, Karachi Line H waste heat boiler extension, etc.

Waste thermal energy is one of the largest sources of inexpensive and clean energy available.

Waste heat power generation, or Waste Heat to Power (WHP), is the process of recovering waste heat and using it to generate power with no combustion and no emissions.

Recovery of waste heat helps reduce energy costs for industrial processes. By using the waste heat to generate emission-free electricity, industrial users can put wasted energy back into the process that created it, route the power somewhere else in the facility, or sell it to the grid to support clean energy production, distribution and use.

Moreover, such practices are in conformity with the initiative to build a green CPEC.

Source : https://www.gwadarpro.pk/1391977367882969090/chinese-energy-saving-company-to-transform-emlucky-em-cement-lines

Lucky Cement, TRG expect upgrades in MSCI indices

Lucky Cement is likely to get promoted to the MSCI Standard Index and TRG Pakistan stands ready to be included in the MSCI Emerging Market Small Cap Index, analysts said.

“Both Lucky and TRG are now among the top five heavy weight KSE-100 index movers with 4.98 percent and 3.84 percent weight, respectively. Occurrence of this eventuality over the long holiday season is likely to bring a post-festivity rally on the local bourse,” Wajid Rizvi at KASB Securities said.

There is some chatter in the market regarding possible inclusion of Lucky Cement in the main index. “However, we do not expect any deletions or additions of constituents in MSCI Pakistan Index under MSCI Global Standard Indexes. LUCK is unlikely to meet free float capitalization requirement of over $750 million,” said Topline Research.

The existing constituents are Oil and Gas Development Company, MCB Bank and Habib Bank.

MSCI will be releasing the results of the MSCI May 2021 semi-annual index review on May 11.

The latest MSCI updates for March 31 2021 highlighted that the smallest constituent in EM Index and Small Cap Index had a free-float of $108.9 million and $37.5 million, respectively.

This takes away a possible exclusion of the stocks that seem to drop out from investability concerns.

“We highlight Packages Limited as a possibly drag on Small Cap Index from Pakistan; however, it covers basic investability grounds in major aspects”.

Lucky Cement gained 30 percent higher free-float market capitalisation since October 30, 2020 and saw improving investability conditions at the local bourse.

During the last update in October 2020, the markets were still recovering from the pandemic, and would have been an unlikely proxy for the review to make concrete changes. The market has now consolidated largely from V-shaped economic recovery and there is enough warranties over assessment through the investability criteria.

As per the April 2021 methodology update, the MSCI Standard, MSCI Small Cap and MSCI Equity Indexes have transitioned into global investable market indexes methodology. The uniform criteria accounts for a broad-based classification mechanism.

“Based on index continuity rules, there has been a high probability that Pakistan is shifted to a monitoring list for a possible downgrade. Paradoxically, this will change the tone for future market direction KSE-100 index has performed better in Frontier Markets in our past as compared to the performance in the Emerging Markets,” Rizvi added.

Pakistan has been part of MSCI Emerging Market owing to the index continuity rule since May 2019. “However, we do not expect any developments with respect to Pakistan’s exclusion from MSCI EM,” said Topline Research. “We estimate Pakistan’s weight is likely to remain around 0.02 percent.”

Source : THE NEWS

Forestalling uptick in construction, Pakistan’s cement manufacturer plans expansion

Expecting a surge in construction activity and a rise in demand for construction materials, one of Pakistan’s leading manufacturers of cement Maple Leaf Cement Factory Limited is planning to increase its capacity.

As per Bloomberg, the company is considering enhancing its production capacity by 7,000 tons a day, and the proposal is in the final stages.

Maple Leaf Cement Factory Limited set up in 1960 as a public limited company. It is part of the Kohinoor Maple Leaf Group, with Kohinoor Textile Mills Limited as its holding company. The company seeks to take advantage of the recent government-announced construction package, which aims to uplift the economic activity and aid the economy to recover during Covid-19.

Just days ago, a number of cement manufacturers announced to increase their cement production, Kohat Cement Company Limited (KOHC) announced that it would be setting a multi-billion rupees cement manufacturing plant in Punjab.

As per the company statement, the Board of Directors of the company has approved the setting up of 7000-10000 TPD Cement Manufacturing Plant.

Furthermore, Fauji Cement Company Limited (FCCL) also informed that it has decided to invest in additional cement capacity.

The company has approved the setting up of Greenfield Cement Manufacturing Plant of 2.05 million tonnes per annum at Dera Ghazi Khan, Punjab.

It is pertinent to inform that Maple Leaf Cement saw a 5 percent increase in sales revenue during 1QFY21 year on year. This was a direct result of increase in sales price as a result of growing demand; the latter in turn was a result of growth in the construction sector.

Source: BR

Lucky Cement to expand its Pezu Plant by 3.15mln tons

KARACHI: Lucky Cement has announced expansion of its Pezu Plant (North Region) by 3.15 million tons to 10 million tons due to rising cement demand, a notice filed with the Pakistan Stock Exchange said on Monday.

This would take total capacity (north and south) for Lucky Cement to 15 million tons, which would help it cater the rising demand created by accelerated activity in infrastructure and other development projects.

Topline Securities in a report said this project was expected to cost Rs25 billion to Rs26 billion. “The company is likely to get Rs10 billion under concessionary loans (Rs5 billion in TERF and Rs5 billion in LTFF) at a cost of 2-4 percent,” the report added.

The rest of the funds would be financed through internal cash generation. This facility was expected to come online by the second half of financial year 2023. “We believe, this expansion will have earnings impact of Rs9-10/share (7-8 percent of FY23 earnings),” the report said.

The brokerage also said that there was enough space for cement expansions from FY22 onwards in the northern region, as local sales utilisation would be above 85 percent (total utilisation over 95 percent). Industry dynamics remain comfortable when local sales utilisation remains above 70 percent.

“We estimate north can accommodate 10-15 million tons of cement capacity without significantly impacting prices, as local sales utilisation will still remain above 70 percent,” the report added.

Taurus Research in its note said the expansion would likely enable the company cater the growing local demand, as economic activity accelerated along with uptick in both retail and mega infrastructure development projects. Lucky Cement has a domestic cement market shared of 13.7 percent as per FY20 financials.

Source : THE NEWS