Maple Leaf’s profit dives 50% to Rs557 million in Q3

Reduction in PSDP, discount on cement sales impact the earnings

KARACHI: Maple Leaf Cement Factory Limited’s (MLCF) after-tax profit plummeted 50% in the quarter ended March 31, 2019 owing to sluggish demand.

The cement company reported a profit of Rs557 million compared to Rs1.12 billion in the same quarter of 2018, according to a notice sent to the Pakistan Stock Exchange.

Earnings per share (EPS) of the company stood at Rs0.94 in the Jan-Mar 2019 quarter against Rs1.89 in the same quarter of previous year.

“A reduction in the government’s Public Sector Development Programme (PSDP) caused the slowdown in cement demand,” pointed out JS Research analyst Arsalan Ahmed. “Maple Leaf gave discounts during the period to support its sales, therefore, it witnessed a decline in profits.”

The company’s net sales amounted to Rs6 billion during the period under review against Rs7 billion in the corresponding quarter of last year.

Cost of sales inched down from Rs4.7 billion to Rs4.6 billion in the Jan-Mar 2019 quarter due to weak sales caused by rupee depreciation.

Gross profit of the company during the quarter shrank to Rs1.3 billion compared to Rs2.3 billion in the same quarter of 2018. Other charges narrowed to Rs24 million against Rs159 million last year. Profit from operations dived from Rs1.7 billion to Rs987 million in the quarter under review.

Nine-month result

In the nine months ended March 31, 2019, the company recorded a profit of Rs1.9 billion, 33% lower than Rs3 billion in the same period of previous fiscal year.  Earnings per share fell to Rs3.19 in Jul-Mar FY19 against Rs6.01 in the corresponding period of FY18.

Net sales fell to Rs18 billion during the period under review against Rs19 billion in the same period of last year. Cost of sales inched up to Rs13.5 billion against Rs12.7 billion last year. Gross profit dropped from Rs6.4 billion to Rs4.7 billion.

Profit from operations was calculated at Rs3.4 billion compared to Rs5 billion in the same period of previous fiscal year. On the other hand, finance cost rose to Rs1 billion in first nine months of FY19 against Rs563 million in the same period of FY18.

The company booked tax expenses of Rs553 million in Jul-Mar FY19 against Rs1 billion in the same period of 2018.

Published in The Express Tribune, April 26^th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.