Maple Leaf Cement Factory Limited (MLCF) announced the financial result for FY23 today, posting a profit after tax (PAT) of PKR 5,771mn (EPS: PKR 5.38) compared to PKR 4,553mn (EPS: PKR 4.24) in SPLY, depicting an increase of 27% YoY. Surprisingly, during 4QFY23 loss arrived at 413mn (LPS: PKR 0.38) in contrast to net profit PKR 232mn (EPS: PKR 0.22) in SPLY.

Result Highlights

· Topline during FY23 reached PKR 62,075mn, up by 28% YoY led by a noteworthy hike in retention prices which offset the impact of a 10% decline in overall dispatches to 4,106k tons. It is pertinent to note that during FY23 exports increase by 18% YoY to settle at 119k tons due to rehabilitation activity in Afghanistan. In 4QFY23 sales were recorded at PKR 14,986mn (up 4% YoY) as compared to last year. Increase in cement prices were more than enough to offset the impact of 17% YoY decline in total dispatches.

· Gross margins during FY23 settled at 28.4% vs 27.3% last year, owed to higher retention prices coupled with a decline in coal prices. However, in 4QFY23 gross margins fell to 24.8% (down 210bps YoY), due to increase in depreciation charged amid commencement of Line-4.

· Other income in 4QFY23 rose to 56mn, an uptick of 65% YoY in SPLY. This led other income in FY23 to come at 147mn vs 60mn last year, an increase of 145% YoY.

· In FY23 finance cost clocked in at PKR 2,381mn vis-à-vis PKR 1,658mn (up 44% YoY) amid hike in interest rates. During 4QFY23 finance cost arrived at PKR 888mn a surge of 75% YoY as compared to 4QFY22, due to aforementioned reasons.

· Due to re-imposition of super tax and recognition of deferred tax adjustment, effective taxation arrived at 121% in 4QFY23 vs 90% in 4QFY22. With this, the effective taxation in FY23 settled at 46% vs 44% in SPLY.

Other information

The board of directors approved the following:

· Recommendation of a buyback of ordinary shares up to a maximum of 100 million (9.3% of total number of shares and 20.7% of free float).

· Investment up to PKR 1bn as loans/advances to Kohinoor Textile Mills Limited (KTML), a holding company, to meet working capital requirements of KTML.

· Loans/advances of PKR 1bn to meet working capital requirement of Maple Leaf Capital Limited (MLCL), an associate company.

· Equity investment of PKR 4bn into a wholly owned subsidiary, Novacare Hospitals (Pvt) Limited.

Courtesy – AHL Research