Lucky Cement Limited (PSX: LUCK) posted a stronger-than-anticipated profit for the first quarter of FY25, reporting Rs6.56 billion in net earnings, or an EPS of Rs22.4. This surpassed analysts’ projections of Rs20.98 per share, though it marked a slight 5.3% decline from Rs22.62 per share in the same period last year (SPLY). Despite the drop in profit, the company saw improvements in revenue and other income, which supported the bottom line amid rising costs.
Revenue and Gross Profit Analysis
Lucky Cement’s revenue rose by 1.5% year-over-year to Rs29.82 billion, reflecting a steady sales performance compared to Rs29.38 billion in Q1 FY24. However, the cost of sales increased by 7.8%, negatively impacting the gross profit, which declined by 9.3% to Rs9.83 billion in Q1 FY25. Consequently, gross margins decreased to 32.9%, down from 36.9% in SPLY, reflecting increased production and operational costs.
| Metric | Q1 FY25 vs. Q1 FY24 |
|---|---|
| Revenue | Rs29,822,489 vs. Rs29,381,807 |
| Gross Profit | Rs9,826,003 vs. Rs10,830,339 |
| Gross Margin | 32.9% vs. 36.9% |
Rise in Other Income and Operational Expenses
The company reported a 25.0% increase in other income, totaling Rs3.94 billion compared to Rs3.15 billion in SPLY. This increase provided some offset to the higher operational expenses, which included a 22.6% increase in administrative expenses, reaching Rs598.85 million, and a 35.5% rise in selling and distribution expenses, which reached Rs2.35 billion.
| Metric | Q1 FY25 vs. Q1 FY24 |
|---|---|
| Other Income | Rs3,938,510 vs. Rs3,151,047 |
| Administrative Expenses | Rs598,845 vs. Rs488,562 |
| Selling and Distribution Expenses | Rs2,350,430 vs. Rs1,734,869 |
Finance Costs and Taxation
Finance costs decreased by 5.8%, standing at Rs359.59 million, largely attributed to improved financing strategies. The tax expense also fell by 7.5%, bringing the effective tax rate to 33.2% from 33.8% in SPLY.
| Metric | Q1 FY25 vs. Q1 FY24 |
|---|---|
| Finance Costs | Rs359,589 vs. Rs381,871 |
| Tax Expense | Rs3,266,858 vs. Rs3,531,502 |
| Effective Tax Rate | 33.2% vs. 33.8% |
Conclusion: Positive Outlook Amid Cost Pressures
Lucky Cement’s Q1 FY25 results exceeded expectations, driven by stable sales growth and increased other income, though rising production costs and operational expenses remain concerns. The company’s strategic cost management and revenue performance position it well for future quarters, provided cost pressures can be contained.
