MLCF_3QFY24 Result Review — Lower gross margins lead to earnings decline (AKD Off the Analyst's Desk Apr 25, 2024)
AKD, Off the Analyst's Desk MLCF: 3QFY24 Result Review — Lower gross margins lead to earnings decline Maple Leaf Cement Factory Limited (MLCF) just announced its 3QFY24 financial results, wherein the company posted consolidated earnings of PkR1.5bn (EPS: PkR1.4) compared to PkR2.2bn (EPS: PkR2.1) in the quarter before, a decline of 33%QoQ. The said drop in profitability is primarily attributable to lower sales volumes and a contraction in gross margins. The result was in line with our expectations of PkR1.4/sh. • Total revenue witnessed a decline of 12%QoQ to PkR16.0bn, driven by a 16% quarterly drop in the sales volumes (0.92mn tons vs. 1.10mn tons in 2QFY24). • Gross margins contracted to 29.9% against 35.3% in 2QFY24, owing to higher estimated local coal prices following the implementation of axel load regulations (PkR38.2k/tons vs. PkR37.9k/ton in the preceding quarter). • Distribution cost clocked in at PkR1.3bn vs. PkR1.6bn, a decline of 20%QoQ, likely due to reduced transportation charges amidst the aforementioned decrease in offtakes. • Finance costs decreased by 10%QoQ to PkR825mn, primarily on the back of reduced borrowings. • That brings 9MFY24 earnings to PkR5.0/sh compared to PkR5.7/sh in SPLY, down 13%YoY, due to sharp incline in operating expenses amid elevated inflation along with higher financial charges.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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