KARACHI: Maple Leaf Cement announced a consolidated profit of Rs3.37 billion in the nine-month period ended March 31, 2018, down 14.7%, mainly due to contraction in margins, according to a notice sent to the Pakistan Stock Exchange (PSX).
Earnings in the previous year stood at Rs3.39 billion.
Growth in the company’s revenues during the outgoing quarter was driven by higher volumes, up 23% year-on-year, where local demand depicted stellar growth of 30% due to increased private sector construction activities and demand from projects under the China-Pakistan Economic Corridor (CPEC), stated a Topline Securities report.
Demand for cement has been on the rise in the country, but increasing cost mainly due to higher coal and furnace oil prices has put pressure on profitability.
While consolidated gross margins were down 3.9 percentage points to 34% in 3QFY18, cement operations margin significantly contracted by 8.4 percentage points to 30%. “We attribute this to higher input costs and lower local net retention as cement prices in north remained under pressure during the period under review,” Topline added.
Finance cost of the company increased by 202% to Rs593 million compared to Rs196.3 million in the previous year. Higher finance cost relates to interest payment on debt raised to finance its wholly owned subsidiary Maple Leaf Power Limited.
Published in The Express Tribune, April 26th, 2018.