Maple Leaf Cement (MLCF): 1QFY21 EPS at Rs0.51 vs. 1QFY20 LPS of Rs0.75 (higher than expectations)
- Maple Leaf Cement (MLCF) turned in a consolidated profit of Rs555mn (EPS: Rs0.51) in 1QFY21 after posting loss for four consecutive quarters.
- Earnings were higher than our expectations of Rs0.34/share due to lower than expected effective tax rate of 18% and slightly lower than expected distribution costs.
- Gross margins of the company clocked in at 19.5% (broadly in line with our expectations of 18.5%), up 17.8ppts YoY due to improvement in retention prices by ~7% YoY and fall in Fuel and Power costs as coal prices averaged lower by 27% YoY in 1QFY21.
- Net Sales of the company increased by 5% YoY despite fall in dispatches by 2.3% YoY to 1.17mn tons. We attribute this increase to improvement in retention prices as discussed above.
- Finance cost declined by 47% YoY as loan repricing has started to kick in after decline in policy rate by 625bps.
- Effective tax rate clocked in at 18%, lower than our expectations of 27%. However, in last four quarter company has booked tax reversals.
Selling and distribution expenses declined by 7% YoY due to decline in volumetric sales by 2.3% YoY to 1.17mn tons.
Maple Leaf Cement Factory is engaged in the production and sale of white cement, grey cement and clinker. Co. is a subsidiary of Kohinoor Textile Mills Limited.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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