Karachi, April 20, 2022 (PPI-OT): MLCF: 3QFY22 Unconsolidated EPS clocked in at PkR1.08 – In-line with expectations

Maple Leaf Cement Limited (MLCF) announced its 3QFY22 result where company posted unconsolidated PAT of PkR1.2bn (EPS: PkR1.08), down 73/35% YoY/QoQ, taking 9MFY22 PAT to PkR3.6bn (EPS: PkR3.27), down 35%YoY. The result was in-line with our expectations.

Company’s topline increased by 27% on YoY basis majorly due to increase in prices as manufactures looked to pass on the impact of increase in coal prices. However, sequentially, topline declined by 2% where impact of decrease in offtake more than set off the impact of increase in prices.

Unconsolidated gross margin for 3QFY22 clocked in at 24% against our expectations of 23%. Margins declined on QoQ basis as increase in energy and power cost became a drag while on YoY basis, they improved by 1ppts.

Other income declined significantly due to high base effect as company realized dividend from Maple Leaf Power in 3QFY21. Impact of increasing interest rates is becoming visible on company’s income statement with finance cost for 3QFY22 standing at PkR494mn, up 42/30% YoY/QoQ.

Along with the result, MLCF announced a decision to buy-back upto 25mn shares at the spot/current share prices. The buy-back will be 5% of the free float of the company and is subject to approval from shareholders.

We have a Buy stance on the stock with a TP of PkR57.8/sh, providing upside of 52%.