Karachi, August 06, 2021 (PPI-OT): LUCK and ACPL: Margins to take a hit in 4QFY21E

We present earnings estimates for Lucky Cement Ltd. (LUCK) and Attock Cement Pakistan Ltd. (ACPL) ahead of the June-2021 result announcements. We expect a dip in margins on a QoQ basis for the two companies as a result of higher coal costs and lower volumetric sales. Furthermore, we expect LUCK and ACPL to announce DPS of Rs10.00 and Rs3.50, respectively.

Result Previews

Lucky Cement (LUCK): We preview 4QFY21 EPS of Lucky Cement Limited (LUCK) wherein we expect the company to post stand-alone EPS of Rs7.4 for the quarter, up 5.9 times from the reported earnings of Rs408mn (EPS: Rs1.3) for 4QFY20. On a cumulative basis, FY21 earnings are estimated to increase by 4.2 times YoY to Rs43.5 per share largely on account of better retention prices, increase in volumetric sales and reduction in FED by Rs25/bag. A heavy dividend income of Rs3.9bn from Lucky Motors Corporation, ICI and Yunus Energy in the third quarter is another major reason for this accretion in earnings during the year. We believe LUCK will post a consolidated EPS of ~Rs18.7 in the last quarter taking the full year EPS estimate to Rs75.0, compared to an EPS of Rs18.7 for FY20.

Attock Cement (ACPL): ACPL is projected to post standalone earnings of Rs250mn which translates to an EPS of Rs1.82 for 4QFY21. Earnings will be lower on a QoQ basis, primarily due to depressed gross level performance (a 5ppt QoQ decline) where the main culprits were higher coal prices and inability to timely pass on the coal price hike’s impact by players in the Southern region. Full year earnings for the company are expected to clock in at Rs8.77 per share, depicting a 9% YoY increment. Along with the result, we expect ACPL to announce a cash dividend of Rs3.5 per share.