Maple Leaf Cement Factory Limited (MLCF) is scheduled to announce its 3QFY21 financial result in pre-open tomorrow.

The markets expect that the company to post earnings of PKR 1,458mn (EPS: PKR 1.33) compared to a loss of PKR 960mn (LPS: PKR 0.87) in SPLY and PKR 1,070mn (EPS: PKR 0.97) in 2QFY21. The stunning turnaround in MLCF’s bottom-line can be owed to improvement in margins during the quarter (31.5% in 3QFY21 vis-à-vis 1.3% in 3QFY20) as recovery in prices in North, together with soft coal prices and stable currency YoY (post recent appreciation) offset the impact of a 4% decline in total dispatches (1,245k tons vs. 1,296k tons).

At the same time, gross profit margins on a QoQ basis (+707bps) was aided by a PKR 50/bag hike in prices in the North region, which should offset the impact of higher coal prices and a 7% decline in offtake (2QFY21: 1,343k tons). This will take the 9MFY21 profitability to PKR 3,083mn (EPS: PKR 2.81) against a loss of PKR 2,727mn (LPS: PKR 2.48), with margins clocking-in at 25.5% vs. 3.1% last year amid aforementioned reasons. In addition, finance costs are set to come down by 57% YoY to PKR 1,019mn amid lower interest rates.

Courtesy – Company Financials, AHL Research