Maple Leaf Cement to announce 9MFY22 result today – increased energy prices may impact it

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

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