AHL Research Ltd highlighted key developments at Lucky Cement Ltd's Annual General Meeting (AGM), underscoring the company’s strong FY26 performance and strategic growth initiatives.

Demand & Sales
Cement demand rebounded after four years of sluggish growth, supported by lower interest rates, a stable currency, and improved retail activity. Domestic sales reached 6.5Mt, securing a 15.7 per cent market share within industry-wide sales of 41.5Mt. Export volumes eased by 0.3Mt, impacted by the Afghan border closure.

Operations & Expansion
South operations ran at near 100 per cent utilisation, with domestic demand growth of 10–13 per cent and exports absorbing excess capacity. Expansion plans are under evaluation in both North and South, with management noting a typical two-year timeline. Export margins remain below domestic margins, reinforcing the strategy to prioritise local sales.

Energy and Costs
The Karachi plant added 15MW of solar capacity, raising total renewable power to 89MW solar and 29MW wind, meeting 55 per cent of energy needs. Royalty costs vary by region, with Sindh at PKR125 (US$0.45)/ton, KPK at PKR350/ton (with annual increases), and Punjab’s mechanism under litigation. Distribution expenses totalled PKR8.9bn.

Technology & Diversification
Machine learning-based European technology has been deployed at the Karachi plant, reducing coal consumption. Lucky Motors expanded its portfolio by adding GAC Group alongside Samsung, Peugeot, and Kia, with new models expected soon. The auto/mobile segment is generating a ~50 per cent return on investments of PKR14–15bn.

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Financials & International Growth
Group profit rose 14 per cent YoY to PKR96.5bn, led by cement, auto, mobile, and Lucky Electric segments. Congo operations are expanding capacity from 1.6Mt to 3.2Mt within 18 months. Iraq operations face near-term uncertainty but remain a high-ROI investment. Long-term investments of PKR57bn continue to deliver strong returns, while the “Other” segment contributed PKR6bn in operating profit.

Outlook
Management emphasised financial flexibility, ongoing cost optimisation, and strategic expansion in both domestic and international markets, positioning Lucky Cement as a resilient industry leader despite competitive pressures.

By Abdul Rab Siddiqi, Pakistan