Earning Review: MLCF sees a significant downturn in earnings

September 20,2019 (MLN): The financial year ended on June 30th, 2019 has appeared as miserable for Maple Leaf Cement Factory Limited (MLCF) as its net profits after tax down significantly by around 60% YoY to Rs 1.46 billion from Rs 3.6 billion last year.

Maple Leaf Cement Factory Limited (MLCFL) is one of the largest cement factories and is a part of the Kohinoor Maple Leaf Group, which is one of the leading textile manufacturers of the country. It has a diversified product range and is the only cement company in Pakistan capable of producing grey, white, sulphate resistance and low alkali cement.

The decline in profitability largely came from higher coal prices given currency depreciation, as MLFC is quite vulnerable to changes in coal prices.

Further injury was drawn from a colossal rise in finance cost of the company due to borrowing for new plant and working capital requirements together with higher benchmark interest rates.

The company observed 74% YoY drop in taxation income owing to recognition of a tax credit on its newly inaugurated plant in 4QFY19, which provided cushion to the company’s profitability.

On the revenue front, the company observed a marginal increase in its net revenues mainly due to lower dispatches sold during the year.

Moreover, the company depicted a downturn in its Earning Per Share (EPS) of 60.7% from Rs 6.29 to Rs 2.47. Subsequently, the company announced a final cash dividend of Rs 0.5 per share for the period mentioned above.

Financial Results for the year ended June 30th, 2019 ('000 Rupees)

 

Jun-19

Jun-18

% Change

Sales – net

 26,005,944

 25,699,113

1.19%

Cost of Sales

 (21,088,864)

 (18,676,562)

12.92%

Gross profit

 4,917,080

 7,022,551

-29.98%

Distribution cost

 (933,244)

 (736,142)

26.77%

Administrative expenses

 (733,607)

 (730,551)

0.42%

Other charges

 (456,493)

 (572,436)

-20.25%

 

 (2,123,344)

 (2,039,129)

4.13%

Other income

 42,997

 55,935

-23.13%

Profit from operations

 2,836,733

 5,039,357

-43.71%

Finance cost

 (1,172,557)

 (644,121)

82.04%

Profit before taxation

 1,664,176

 4,395,236

-62.14%

Taxation

 (198,877)

 (763,035)

-73.94%

Profit after taxation

 1,465,299

 3,632,201

-59.66%

Basic and diluted earnings per share (Rupees)

 2.47

 6.29

-60.73%

 

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Posted on: 2019-09-20T10:55:00+05:00

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