Third quarter earnings for Lucky and Attock Cement were down 42 per cent and 15.26 per cent, respectively compared to the same period of the previous year. Cement sales increased solidly last year on the back of increased exports and higher international prices companies were selling at. However, for the current year, the company’s have been set back by lower export sales, and have had to rely on the domestic market, selling their products at lower prices.
This corrected the anomaly of last year’s cement company margins, according to Furqan Punjani, an analyst from Topline, who termed the previous year’s growth as ‘abnormal’. Analysts do agree that Lucky cement will still recover.
Topline base this forecast on the fact that Lucky Cement is the largest producer in Pakistan and will be able to handle bulk transport better than other producers because the company will also be generating income from selling electricity to KESC. Lucky Cement has also signed an Memorandum of Understanding with M/s Oracle Coal fields for the supply of indigenous coal, thus reducing import costs and the risk of rupee depreciation, according to Furquan Punjani. Analysts at KASB also expect Lucky Cement’s earnings to recover in the next 12 months.