Maple Leaf Cement Factory Limited announced its results for 3QFY21, reporting a PAT of PKR 1,223Mn (EPS: PKR 1.11), up 53% QoQ. The 9MFY21 PAT clocked-in at PKR 2,849Mn (EPS: PKR 2.59), compared to LAT of PKR 2,727Mn (LPS: PKR 2.48) in 9MFY20. The strong performance was reported mainly on account of higher retention prices (↑51/18% YoY/QoQ) and fixed cost absorption.

Key highlights of the result are summarized below: –

The net sales of MLCF were reported at PKR 9,477Mn (↑37/4% YoY/QoQ). The main contributing factor was the increase in cement bag prices (17/7% YoY/QoQ). Resultantly, total 9MFY21 sales increased to PKR 26,098Mn, up 13% YoY.

MLCF’s gross margins clocked-in at 26.8% in 3QFY21 compared to 1.3/21.6% in 3QFY20/2QFY21, respectively. The margins witnessed a massive increase on account of higher cement retention prices (↑51/18% YoY/QoQ) and lower COGS (↓3% QoQ).

The distribution expense increased proportional to sales at PKR 316Mn, ↑80/33%, YoY/QoQ. Likewise, administration expenses also increased by 48/12% YoY/QoQ to settle at PKR 263Mn.

Other charges demonstrated a robust growth of 115/22% YoY/QoQ to close at PKR 119Mn. Other income improved by 202% YoY but declined 12% QoQ to reach PKR 58Mn.

Financial charges dropped to PKR 304Mn (↓56/18% YoY/QoQ) due to stable interest rates and lower debt levels.

We have a BUY stance on MLCF with a Dec’21 TP of PKR 86.5/sh, offering an upside of ~85% from the last close. Further analysis will be done once detailed results are out.

Courtesy – BMA Capital Management Ltd.