MLCF: Higher depreciation charges, PKR depreciation erode bottom line

February 26, 2020 (MLN): Maple Leaf Cement Factory Limited (MLCF) has announced its financial results for the half-year ended December 31, 2019, as per the results, the company has incurred losses worth Rs 1.76 billion (LPS: Rs 2.42) against net profits of Rs 1.33 billion (EPS: Rs 1.94) of same period last year.

The key reasons for the losses suffered by the company were mainly PKR depreciation and higher depreciation charges.

During the period under review, the topline jumped by 30% YoY to Rs 16 billion on an account of the massive increase in dispatches which offset the impact of lower retention price. However, the gross profit decreased by 82% YoY due to higher production cost and stiff price competition in the industry. Therefore, the gross margin shrunk from 27% to 4%.

On the cost side, the total cost went down by 1.25% YoY due to a significant decrease in other charges which down by 62% YoY.

On the other hand, the other income increased substantially by 5 times YoY to stand at Rs 99.47 million.

Meanwhile, the finance cost ballooned 2.31 times YoY to clock in at Rs 1.67 billion which further injured owing to a higher rate of interest on higher short term borrowing requirements from recent expansion.

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