Lahore: Maple Leaf Cement Factory Limited (MLCF) announced its financial results for the first quarter of fiscal year 2027, revealing consolidated earnings of Rs3.7 billion, equivalent to an earnings per share (EPS) of Rs3.54. This marks a 36% increase year-on-year but a 13% decline quarter-on-quarter.

According to JS Global, the higher-than-anticipated earnings were driven by gross margins that exceeded industry expectations. MLCF reported gross margins of 39.4% in 1QFY27, up from 33.9% in the same quarter the previous year, although down from 43.7% in the fourth quarter of fiscal year 2026. The increase in margins on a year-on-year basis was primarily attributed to lower-cost coal inventory and the utilization of biomass.

Despite the positive earnings report, the results fell short of some forecasts, particularly those predicting an EPS of Rs4.1. The discrepancy was mainly due to higher-than-expected finance costs and a loss from associates. Finance costs saw a significant increase, multiplying 6.2 times year-on-year and rising 8% quarter-on-quarter to Rs2.5 billion, largely attributed to higher debt levels. This included a significant Rs76 billion loan used to finance the acquisition of Pioneer Cement Limited (PIOC).

The company also reported a share of loss from associates amounting to Rs683 million in 1QFY27, a notable rise from Rs3.1 million in 1QFY26 and Rs394 million in the previous quarter. Net revenue for the quarter reached Rs30.9 billion, representing an 88% year-on-year increase and a 10% rise quarter-on-quarter. This growth was driven by the consolidation of PIOC, higher domestic dispatches, and increased cement prices.

Administrative expenses rose by 83% year-on-year due to the consolidation of PIOC but declined 19% quarter-on-quarter to Rs1.07 billion. The effective tax rate stood at 38.7%, with absolute tax charges reported at Rs2.7 billion.

JS Global maintains a Buy stance on MLCF, with the company trading at a fiscal year 2027 estimated price-to-earnings ratio of 6.0x.