Maple Leaf Cement’s quarterly profit drops 18.4pc

KARACHI: Maple Leaf Cement’s (MLCF) profit fell 18.4 percent for the quarter ended December 31, 2017 as low prices impeded the growth of sales, analysts said on Friday.

Analyst Tahir Abbas at Arif Habib Limited said the company witnessed a trivial uptick in turnover.

"Although dispatches went up by 4.0 percent in the quarter owing to improved domestic demand; however, lower realised cement prices in North led to a muted top line growth,” Abbas added.

The cement maker, during the period under review, posted a net profit of Rs1.174 billion as against Rs1.439 billion registered during the corresponding period last year. A company’s notice sent to Pakistan Stock Exchange showed the company’s earnings per share (EPS) for the aforementioned period clocked in at Rs2.12 as compared to EPS of Rs2.73/share announced previously.

“The company also declared an interim cash dividend of Rs1.5/share,” the notice said. “Sales revenue for the quarter ended December 31, 2017 stood at Rs6.47 billion, up 1.25 percent from Rs6.39 billion recorded in the same period previous year.

The company’s finance costs surged three times to Rs186 million amid higher leveraging.

“For the half-year ended December 31, 2017, the company posted a net profit of Rs2.247 billion translating into an EPS of Rs4.12 compared with the profit of Rs2.62 billion and EPS of Rs4.97 in the same period previous year,” the bourse filing said. Analyst Nabeel Khursheed at Topline Securities said effective tax rate of the cement maker clocked in at 19 percent, down 13 percentage points year on year in 2QFY18.

“One of the reasons for this was the tax benefit which MLCF received for setting up a coal power plant,” Khursheed said. “On sequential basis, net revenues were up 12 percent while net earnings grew by nine percent mainly owing to lower effective tax rate.”