Maple Leaf Cement Factory Limited (MLCF) will be holding its board meeting today to announce 9MFY22 result where we expect unconsolidated EPS of PkR3.2 for 9MFY22, down 36%YoY. Unconsolidated EPS for 3QFY22 is expected to stand at PkR1.02, down 75/39% YoY/QoQ. The decline in profitability is a result of increasing energy prices where we witnessed coal prices touching an all time of high of USD460/ton during Mar’22.

However, company has been utilizing other sources to counter the impact of coal prices where Afghan coal took the lead with MLCF utilizing it for 60-70% of the energy requirement for line-1 and line-2. For line-3, company has relied on pet coke to fulfill its energy requirements.

A significant decline of 75% in profitability for 3QFY22 on YoY basis is majorly due to high base as MLCF realized a dividend from Maple Leaf Electric.

Topline for 3QFY22 is expected to increase by 25%YoY majorly due to higher retail prices as manufacturers look to pass on increasing cost however on QoQ basis, topline is expected to decline by 3% as impact of higher prices has been more than offset by the decline in offtake. Gross margin for 3QFY22 is expected to stand at 23% against 31% for 2QFY22 while on YoY basis, a decline of 0.6ppts is expected to be witnessed.

On consolidated basis, we expect profitability to stand at PkR1,392bn (EPS: PkR1.27) for 3QFY22.

Courtesy – AKD Research