Lucky Cement Limited [PSX: LUCK] is the flagship company of Yunus Brothers Group. Incorporated in 1993, Lucky cement is one of the biggest producers and chief exporters of cement in Pakistan with the production capacity of 15.3 MTPA. Lucky Cement Limited is the only cement manufacturer to have its own storage and loading terminal at Karachi port. Historical Performance (2019-24) In 2019, LUCK’s net sales grew marginally by 1 percent year-on-year, but profitability weakened. Cost pressures drove a 17.5 percent drop in gross profit, with gross margin compressing to 29.1 percent from 35.7 percent. Operating profit declined 19 percent, while net profit fell 14 percent to Rs10.5 billion, with net margin easing to 21.8 percent. This was also the first year the company incurred finance cost. 2020 was a difficult year marked by a 12.8 percent decline in topline. Despite weaker sales, cost of sales rose, causing gross profit to plunge 56.5 percent and gross margin to bottom out at 14.5 percent. Operating profit collapsed 67 percent, and net profit dropped 68 percent to Rs3.3 billion, with net margin shrinking to 8 percent. Finance costs surged sharply due to higher working capital usage. 2021 was a strong turnaround year for Luck Cement with net sales rebounding over 50 percent year-on-year. Gross profit jumped 212 percent, lifting gross margin to 30.1 percent. Operating profit surged 334 percent, while net profit rose 321 percent to Rs14.1 billion, restoring net margin to 22.4 percent. Higher finance costs reflected expansion-related borrowings. LUCK’s topline expanded 28.8 percent year-on-year in 2022, largely price-led, despite weaker volumes. Gross profit grew 19 percent, though gross margin eased to 27.8 percent amid elevated input costs. Operating profit increased 25.9 percent, but net profit rose only 8.7 percent to Rs15.3 billion as finance costs climbed with monetary tightening. Net margin declined to 18.9 percent. Net sales grew 18.2 percent in 2023 for Lucky Cement, again driven by pricing rather than volumes. Cost pressures persisted, limiting gross profit growth to 15.6 percent and pulling gross margin slightly lower to 27.2 percent. Operating profit grew just 3.2 percent, while finance costs nearly tripled. Net profit declined 10.3 percent to Rs13.7 billion, with net margin compressing to 14.3 percent. 2024 was a standout year for the company with 20.3 percent topline growth supported by improved volumes and exports. Gross profit surged 48.9 percent, lifting gross margin to 33.7 percent. Operating profit nearly doubled, pushing operating margin to a record 37.3 percent. Despite higher finance costs, net profit jumped 105 percent to Rs28.1 billion, with net margin rebounding to 24.4 percent. LUCK in FY25 Lucky Cement delivered a solid FY25.While domestic cement demand remained under pressure, the company leaned on its scale, diversification, and export flexibility to deliver a solid set of results. Consolidated profit grew 17 percent year-on-year, while standalone earnings rose 18 percent year-on-year. The lift came less from selling more cement at home and more from higher export volumes, steady pricing, and stronger other income. At home, the year was clearly challenging. Domestic dispatches fell 6 percent as construction activity stayed subdued and fiscal pressures weighed on demand. Market share slipped marginally to 16 percent. However, exports stepped in decisively, with volumes jumping 53 percent year-on-year. This shift toward external markets ensured that total dispatches still grew about 9 percent for the year, underscoring management’s ability to redirect volumes when the local market turns soft. Pricing discipline also helped. Domestic retention stayed broadly stable at around Rs15.5 thousand per ton, with the usual premium in the North over the South. Export realizations remained healthy, allowing the company to protect margins despite a difficult operating environment. In a year when many players struggled to defend pricing power, Lucky managed to hold its ground. On the cost side, the company continued to play its cards well. A diversified coal sourcing strategy—local and Afghan coal in the North, imported coal in the South—kept fuel costs manageable, with average coal prices around Rs33 thousand per ton. This flexibility, combined with operational efficiencies, helped cushion margins against energy price volatility. Lucky’s overseas cement operations again proved their worth. Plants in Iraq and the DR Congo operated at high utilization levels, providing a steady earnings base and reducing reliance on Pakistan’s cyclical demand. These international assets have increasingly become a stabilizer rather than a side bet. Another important development of the year was on the energy front. The commissioning of a 28.8MW captive wind power project at the South plant took renewables to about 55 percent of power consumption at that site. Along with battery storage, this move is less about optics and more about resilience—lower costs, fewer disruptions, and reduced exposure to unpredictable grid tariffs. All told, FY25 reinforced Lucky Cement’s evolution. Even in a weak domestic demand environment, the company showed that it can protect earnings by leaning on exports, overseas operations, and a smarter energy mix. It is this ability to adapt—rather than any single good year—that continues to set Lucky apart in the cement space. LUCK in 1QFY26 and beyond Lucky Cement delivered a strong 1QFY26, marked by solid earnings growth and a clear rebound in volumes. Consolidated net profit rose 23 percent year-on-year, while standalone earnings more than doubled, supported by around 18 percent year-on-year growth in cement volumes and improved pricing, alongside higher other income. Net sales increased year-on-year, though gross margins were slightly lower, reflecting higher energy and coal-related costs and revenue-side reimbursement effects. Operationally, performance was encouraging. Domestic dispatches grew strongly, lifting market share, while exports remained stable with a larger share going to Africa and new markets such as the US and Brazil. The company also strengthened its offshore footprint, with the Samawah grinding plant in Iraq commencing operations and expansion announced at the Congo plant, where utilization is already above 90 percent. Cost management remained a focus, with about half of energy needs met through renewables and ongoing efficiency initiatives, partially offsetting the shift toward imported coal. Overall, the quarter reflects a volume-led recovery with resilient profitability, setting a constructive tone for the rest of FY26. Copyright Business Recorder, 2026