Maple Leaf Cement Company Limited (MLCF) announced its result for 1QFY21 wherein the company reported a Profit after Tax of PKR 309mn (EPS: PKR 0.28) compared to a loss of PKR 1,110mn (EPS: PKR 1.01) in the previous quarter.

The company posted above-expected results mainly on account of lower energy costs and better than expected retention prices. As a result, gross margins of the company increased by 23ppts on a sequential basis and 19% on a YoY basis to 16%.

Net sales of the company increased by 25/5% QoQ to PKR 7.5Bn on account of an 8% increase in total cement dispatches. On a YoY basis, net sales increased by 5% despite an 11% decline in total dispatches owing to better cement prices. The combined impact of higher sales and low costs took gross profit for the quarter to PKR 1.2bn.

Selling and admin expense slightly declined by 12% QoQ to PKR 358Mn. On a YoY basis, the cost remained relatively flat, despite an increase in cement dispatches.

Finance costs declined significantly by 19% QoQ to PKR 469Mn mainly due to lower interest rates and a decline in total debt.

Going forward, we expect MLCF to continue earnings performance on the back of lower coal costs and better retention prices.

(BMA Capital)