Maple Leaf Cement (MLCF): 4QFY20 LPS at Rs0.75 vs. 4QFY19 EPS of Rs0.69 (inline with consensus)
- Maple Leaf Cement (MLCF) posted fourth consecutive consolidated quarterly loss of Rs0.75/ share (against our expectation of Rs0.78/share) vs. a profit of Rs0.69/share in 4QFY19.
- The company turned into losses due to erosion in gross margins and increase in finance costs.
- Company reported a decline of 22% YoY in Net Sales in 4QFY20 due to 20% YoY drop in volumetric sales amidst COVID-19 outbreak, which halted dispatches in both local and international markets.
- Administrative expenses remained flattish YoY, as management has been implementing cost cutting measures.
- Selling and Distribution expenses increased by 34% YoY despite the fall in dispatches, as the company is investing in branding activities and sales promotion schemes.
- Finance costs increased by 143% YoY, however declined by 22% QoQ due to fall in interest rates.
During FY20, company reported a loss of Rs3.6bn (LPS Rs3.24), first after eight years of profits, due to price competition amongst players which resulted in GP margins of 2% vs. last 8 years’ average of 33%.
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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