Earns Rs1.5 billion in the second quarter of FY16. PHOTO: kmlg.com
KARACHI: Maple Leaf Cement on Wednesday announced an after-tax profit of Rs1.5 billion in the second quarter ended December 2015, an increase of around 69% over earnings of Rs888 million in the same period of previous fiscal year, shows a company notice sent to the Pakistan Stock Exchange.
Earnings per share stood at Rs2.8 in the October-December quarter compared to Rs1.7 in the same period of previous year.
With the financial numbers, the cement manufacturer also declared an interim cash dividend of Rs1.5 per share as opposed to Rs1 per share last year.
“The result was well above market estimates,” commented Topline Securities in its report.
As a result, Maple Leaf’s share price rose from Rs81.11 to Rs82.42, up 0.64%. Overall, the KSE 100-share index of the Pakistan Stock Exchange fell 326 points or 1.05%.
In the October-December quarter, revenues of the company jumped 13% year-on-year to Rs5.9 billion primarily due to higher cement sales in the domestic market.
In the quarter, local sales of the company grew 15% year-on-year to 700,000 tons in the face of rising demand from the private sector.
Exports, however, fell 11% to 100,000 tons as shipments to Afghanistan dropped following a slowdown in construction activities.
Gross margins of the company improved a robust 734 basis points to 44% in the three months to December 2015. The strong margins were the result of booking coal at a lower cost as prices were down 21% year-on-year on the Richards Bay Index. Moreover, a substantial fall in oil prices - Arab light crude was down 45% year-on-year - led to a 20% decline in power tariff, which further aided the company’s gross margins.
Maple Leaf also benefited from lower financial charges, which dropped 52% thanks to the reduced interest rate environment as the policy rate stood at a 42-year low of 6%.
Apart from this, favourable sector dynamics sparked a strong cash-flow generation that allowed the company to retire its debt early.
In the first half (July-December), revenues were up 12% and net earnings rose 63%.
The risks cited in the report included a further increase in gas tariff, cartel breakdown resulting in a price war, unexpected rise in international coal prices, delay in commencement of construction projects across the country and more-than-expected decline in exports to Afghanistan.
Published in The Express Tribune, January 21st, 2016.
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