Karachi, Lucky Cement Limited (LUCK) announced its second-quarter results for the fiscal year 2024 today, revealing a robust performance with unconsolidated earnings of PkR 6.8 billion, slightly down from the previous quarter but surpassing market expectations.

According to AKD Securities Limited, the company's earnings exceeded forecasts primarily due to higher-than-expected gross margins and a significant dividend from Lucky Motors Corporation (LMC). The consolidated earnings, which include non-core operations, amounted to PkR 60.2 per share, compared to PkR 35.7 per share in the same quarter last year.

LUCK's topline increased by 4% quarter-over-quarter to PkR 30.5 billion, despite a 2% decline in offtakes, thanks to a roughly 4% increase in retention prices. Notably, gross margins remained strong at 36.0%, attributed to efficient coal procurement at favorable rates. This is slightly lower than the 36.9% gross margin in the first quarter of FY24, which the management had described as a one-off event due to advantageous coal inventory procurement.

Other income also exceeded expectations, primarily due to an unexpected PkR 1.4 billion dividend from LMC, totaling PkR 3.0 billion for the quarter. The company's half-year consolidated earnings showed a 92% year-on-year increase, reaching PkR 46.8 per share, driven by these elevated gross margins and a significant rise in other income.

On a consolidated basis, earnings for 2QFY24 reached PkR 60.2 per share, marking a 69% year-on-year increase. This growth was largely driven by a high contribution from Lucky Electric Power Company Limited (LEPCL), which maintained a 100% availability factor in the first half of FY24, and strong performance in foreign cement operations, particularly in Iraq, amid increasing demand and full capacity utilization.

This financial update from Lucky Cement highlights the company's strong performance in a challenging economic environment, bolstered by strategic operations and robust demand in key markets.