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MLCF - Maple Leaf Cement Factory Limited

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Maple Leaf Cement Factory Limited

MLCF

 

April 25th, 2017

 

FINANCIAL RESULT FOR THE NINE MONTHS ENDED 31/03/2017

(UNCONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 5,696.679

(UNCONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 4,051.886

(UNCONSOLIDATED) EPS = 7.68

(CONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 5,597.091

(CONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 3,952.298

(CONSOLIDATED) EPS = 7.49

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Aba Ali Habib Research

14 July 2017

 

MLCF: Smooth-sailing with robust outlook to spur the earnings; Initiate with Buy.

  • We initiate our coverage on Maple Leaf cement (MLCF) with a ‘BUY’ recommendation based on our Dec’17TP of PKR 153.0/share, implying a potential upside of 42.4% along with a dividend yield of 4.0%.
  • We expect FY17E EPS to grow by 13% to PKR 10.46 due to growth in topline and lower finance cost.
  • Brownfield expansion of 2.19mtpa will enhance company’s overall capacity to 5.73mn tons from 3.53mn tons. We expect company to portray volumetric growth at 4 -year CAGR of 10% during FY19-FY22. Consequently, augmented EPS by this project would be in range of PKR 3.15-13.3 during FY19 to FY22 with addition of PKR 31.7 to its share value.
  • The 40 MW Coal fired power plant of the company is likely to come online in 1HFY18 and will result in significant power cost saving of 15% from PKR ~791/ton to PKR~671/ton which translates into per share contribution of PKR 0.57/1.21/1.43 in EPS during FY18/FY19/FY20.
  • Company is currently trading at P/E and EV/ton of 10.0x and 180x which is in line with industry average P/E and EV/ton of 10.0x and 182x. EPS and DPS of the company is expected to clock in at PKR 12.28/3.0, 14.41/7.0, and 17.11/10.0 respectively during FY18/19/20. Key risks to our valuation includes i) delay in commencement of new grey cement line or coal power plant and ii) any substantial rise in coal/oil prices.

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Maple Leaf Cement Factory Limited

(MLCF)

 

August 15th, 2017

 

RIGHT ISSUE =12.50% AT A PREMIUM OF Rs.55/= PER SHARE

BOOK CLOSURE FROM 12/09/2017

BOOK CLOSURE TO 18/09/2017

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AKD Daily,

August 15, 2017

 

MLCF: 4QFY17 Result Preview

 

MLCF is scheduled to announce its 4QFY17 result today (Aug 15'17) where it is expected to post earnings of PkR981mn (EPS: PkR1.86), down 29%YoY/28%QoQ. Lower earnings are expected to arise from 1) 12%YoY/10%QoQ decrease in topline (13%YoY/8%QoQ decline in total cement dispatches) and 2) expected 9.4pptYoY decline in GM to 36.9% (avg. coal prices up 54%YoY in 4QFY17). On a cumulative basis, FY17 earnings are expected to rise by 3%YoY to PkR5.03bn (EPS: PkR9.54). Alongwith the result MLCF is expected to announce a final cash dividend of PkR2.5/sh, taking FY17 payout to PkR4.5/sh. Having lost 23%CYTD, the stock currently trades at FY17F/FY18F PE of 10.2x/8.3x where our Jun '18 TP of PkR179/sh offers an upside of 83% from current price level. Buy!

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Aba Ali Habib Research

16 August 2017

 

Cement Flash Note: MLCF Announcement of 12.5% issuance of right share.

  • Maple Leaf Cement (MLCF) notified PSX regarding its issuance of 12.5% right shares to partially finance its upcoming grey cement expansion of 2.3mn tpa which is likely to come online in 1HFY19. Total estimated cost of the project is PKR 23bn, out of which ~48% (PKR 11bn) will be financed through debt and ~52% through Equity (PKR 7.7bn through internally generated cash and 4.28bn through right share at price of PKR 65/share including premium of PKR 55/share).
  • According to company’s financial projections topline and earnings are likely to grow during FY19-21 at CAGR of 15% and 11%.
  • We have already incorporated the same amount of Capex for 3rd cement line in our projection in ratio of 60% debt and 40% equity. However we will incorporate this announcement in our earnings projection after complete release of FY17 results.
  • We maintain our BUY recommendation based on Dec’17 TP of PKR 153/share implying potential upside of 62.7% from LDCP of 94.0/share.

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Maple Leaf Cement Factory Limited

(MLCF)

 

September 13th, 2017

 

FINANCIAL RESULT FOR THE YEAR ENDED 30/06/2017

 

(UNCONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 6,870.356

(UNCONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 4,777.081

(UNCONSOLIDATED) EPS = 9.05

 

(CONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 6,869.587

(CONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 4,776.312

(CONSOLIDATED) EPS = 9.05

 

DIVIDEND = 17.50%

ANNUAL GENERAL MEETING WILL BE HELD ON 31/10/2017

 

BOOK CLOSURE FROM 21/10/2017

BOOK CLOSURE TO 31/10/2017

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Maple Leaf Cement Limited (MLCF): 2QFY18 EPS Rs2, -18% YoY (+9% QoQ); DPS Rs1.5/share (In-line with expectations)

 

Friday, 16 February 2018

By: Topline Securities (Private) Limited

 

Despite robust growth in local dispatches that we have seen so far, MLCF’s consolidated net sales remained almost flat YoY in 2QFY18 primarily on the back of lower local net retention prices (grey cement). While we await detailed accounts, our initial impression suggests that avg. net retention prices of MLCF declined by Rs20-25/bag YoY to around Rs330-335/bag in 2QFY18.

 

Consolidated gross margins were significantly contracted by 9ppts YoY to ~35% in the outgoing quarter. However, margins from cement operations were down 13ppts to ~31%. We attribute this 4ppts difference in consolidated and unconsolidated margins to start of 40MW coal power plant (setup by MLCF as a subsidiary) which is supplying electricity to MLCF. Dent on cement operations margin in 2QFY18 were owing to higher F.O.B coal prices, up 34% YoY to avg. US$87/ton (with a quarter lag impact).

 

Effective tax rate of MLCF clocked-in at ~19%, down 13ppts YoY in 2QFY18. One of the reasons for this was the tax benefit which MLCF received for setting up a coal power plant, we believe.

 

On sequential basis, net revenues were up 12% while net earnings grew by 9% mainly owing to lower effective tax rate.

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Maple Leaf Cement Factory Limited (MLCF): Result review for 2QFY18

 

Friday, 16 February 2018

By: ASDA Securities (Private) Limited

  • Maple Leaf has announced 2Q18 financial result today. During the period, the company reported profit after tax of PKR 923.75mn, down by 37% from 1,470.71mn in corresponding period last year. EPS of the company for the same period clocked in at PKR 1.56 (1Q18: PKR 2.48) taking half year EPS to PKR 3.62.
  • Net sales for the quarter remained almost flat at PKR 6,479.60mn, on the back lower retention prices in North. The prices for the quarter went down by 28% (PKR 546/bag to PKR518/bag), however total volumetric sales were up by 10.31% to stand 910.641 metric ton in 2QFY18. Local and exports dispatches for the period were 839.706 and 70.934 metric ton respectively.
  • Gross profit for the period also declined by a staggering 29% to clock in at PKR 1,981.92mn. Gross margins for the quarter were 31%, trimming the half yearly gross profit margin to 33%. This can be attributed to recent surge in the international coal prices. Other expenses and income have largely remained the same.

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MAPLE LEAF CEMENT FACTORY (MLCF): STRIKING AT THE RIGHT CHORD

 

18 April 2018

ASDA SECURITIES (PRIVATE) LIMITED

 

 

 

  • We initiate our coverage on Maple Leaf Cement Factory with a HOLD stance on the scrip, offering an upside potential of 6.05% including 3.37% of dividend yield. MLCF is currently trading at a trailing and forward P/E multiple of 8.43x and 11.73x respectively.
  • Demand for cement is to remain upbeat on the back of increased activity in government and private sector housing scheme, rising urbanization, CPEC related infrastructural projects, construction of motorways, water reservoirs and various hydel power projects and with election just around the corner, we believe demand for cement to remain sturdy during the remainder of the current fiscal year.
  • It is highly plausible that the company may be given green light by the Supreme court while other companies in the negative zone will have to search for other alternatives or cede expansions. This is likely to bode well for MLCF in setting strong foot hold in the region.
  • In order to retain its market share MLCF has also announced a brownfield expansion project (line-3) to be setup at its existing site, thereby taking total capacity to 7.3 MT. The project is worth PKR 23Bn, financed through 48% debt and 52% of equity out of which 19% was raised through issuing 12.5% right shares.

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Maple Leaf Cement Factory Limited (MLCF): 9MFY18 EPS down by 36% YoY, to clock in at PKR 4.95

 

 

23 April 2018

Aba Ali Habib Securities (Private) Limited

 

 

 

  • MLCF is scheduled to announce its 9MFY18 result on 24th Apr’18. We expect the company to post 3QFY18 EPS of PKR 1.33, down by 48% YoY. MLCF’s 9MFY18 EPS is likely to clock in at PKR 4.95, down by 36% YoY
  • Topline of the company is likely to grow by 4% YoY in 3QFY18 on the back of 3% QoQ increase in total dispatches while on QoQ basis, export dispatches are expected to decline by 23%. Moreover, higher cost of sales due to surge in coal prices coupled with lower retention prices is likely to dent the company’s margins by 10pps, which is likely to clock in at 28% resulting 48% YoY decline in earnings.
  • Additionally, Finance cost is likely to surge by 1.3x during 3QFY18 due to increase in long term and short term borrowings while cost for 9MFY18 is likely to jump by 1.8x. Other income is expected to decline by 25% YoY during 3QFY18 on account of lower cash position while the same for 9MFY18 is expected to drop by 22% YoY.

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Maple Leaf Cement Factory Limited (MLCF): Higher coal prices to undermine the impact of increasing dispatches

 

 

23 April 2018

Ismail Iqbal Securities (Pvt.) Limited

 

 

 

  • Maple Leaf Cement Factory Limited (MLCF) is scheduled to announce its 3QFY18 result on Tuesday, 24thof April. We expect MLCF’s earnings to decline by 39%YoY to PKR 933 million (EPS: PKR 1.57) due to reduction in cement price during the quarter and increase in coal price which constitutes almost 40-50% of manufacturing costs in of the company. We expect the expensive coal during the quarter along with the impact of recent PKR depreciation to result ina gross margin of 29.6% as compared to 38.5% in SPLY. According to the provisional cement dispatches data, total dispatches of the company increased by 16% YoY during 3QFY18; however, export dispatches for the same period declined by 41% YoY. Hence we expect selling expenses for the quarter to increase by only 13% YoY.
  • According to provisional cement dispatches data, MLCF’s export dispatches during the quarter declined by 41% YoY. On the other hand, total dispatches of the company increased by 16% owing to strong demand from local market. However, cement prices during the quarter remained under pressure which we expect will result in the company’s topline to grow by only 2% as compared to the corresponding period last year. Please note that the average cement price in North declined to PKR 508/bag in 3QFY18 from PKR 538/bag in the corresponding period last year.

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Maple Leaf Cement Factory Limited (MLCF): 9MFY18 EPS expected at PKR 4.67, down 32%YoY

 

24 April 2018

Taurus Securities Limited

 

 

 

  • Maple Leaf Cement Factory Limited (MLCF) is scheduled to have its quarterly board meeting to announce its 9MFY18 financial results today, wherein the cement manufacturer is expected to post a PAT of PKR 2.8bn (EPS: PKR 4.67), down by a massive 32%YoY.
  • Despite an expected ~11%YoY increase in total dispatches, sales revenue in 9MFY18 is expected to stay largely stagnant, on the back of ~2.24% fall in average selling prices
  • Gross margins in 9MFY18 are expected to fall by a significant 9.39pps YoY largely on the back of ~17%YoY increase in coal prices, coupled with ~3% depreciation of the PKR against USD.

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Maple Leaf Cement Factory (MLCF): 3QFY18 Result Review

 

25 April 2018

ASDA Securities (Private) Limited

 

 

 

  • The company reported profit after tax of PKR 881Mn (EPS: 1.47), down by 35%, as compared to PKR 1358mn last year
  • Gross margin of the company stood at 30%, a decline of 8%/0.5%, YoY/QoQ.
  • Exports continued its downward momentum to stand at 63.09 MT for the quarter

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MAPLE LEAF CEMENT FACTORY (MLCF): COVERAGE INITIATION

 

 

07 May 2018

Zafar Securities (Private) Limited

 

 

 

  • We initiate our coverage on Maple Leaf Cement Factory (MLCF) with a “BUY” recommendation based on Dec’18 TP of PKR 84/share. The stock offers a total return of 25%, composed of dividend yield (D/Y) of 3% and capital gain (CGY) of 22% from last price of 67/share
  • Pivotal 2.19MTPA brownfield expansion at company’s existing site, which was previously halted by EPA’s order, is currently in full swing after favorable ruling from LHC and eyeing commencement from April 2019. Said expansion would push MLCF’s total rated capacity by ~65% to 5.55MTPA (Grey clinker: 5.4MTPA & White: 0.15MTPA) along with dilated market share of 10%+. We have incorporated the new grey cement expansion to come online in FY20E and consequently register tax credits under 65B Income Tax Ordinance of around PKR 2.5bn same year
  • Expansion project with estimated cost of PKR 25bn is planned to be financed by 17% rights issue (already issued), 51% debt (expected to be taken FY18/19E) and remaining 32% from internal funds. Fresh debt of PKR 12.75bn is certain to eat into net earnings in wake of rising interest rate environment. At company’s existing borrowing rate of ~7% additional leverage would burden finance cost by PKR ~1bn (EPS: PKR 1.7/share)

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Maple Leaf Cement Factory Limited (MLCF): Lower cement price drags 3QFY18 earnings down by 42% YoY

 

 

16 May 2018

Ismail Iqbal Securities (Pvt.) Limited

 

 

 

  • Maple Leaf Cement Factory Limited (MLCF) announced earnings of PKR 880.8 million (EPS: PKR 1.48) for 3QFY18, reporting a decline of 42% YoY owing to lower cement price in North region which trimmed company’s margins substantially.
  • However, the company’s topline increased by 11% YoY due to considerable increase in its dispatches, taking utilization level for the quarter to 107%. Going forward, we expect the company’s margins to improve slightly in short term; however, margins in FY20 and beyond are expected to remain dull owing to scheduled commissioning of expansion projects.
  • After incorporating results for 3QFY18 and revising some assumptions we have trimmed down our Dec-18 target price to PKR 96/share from previous target price of PKR 111/share. Our revised target price still offers an upside of 44% to MLCF’s last closing price; hence, we are maintaining our positive stance on the scrip

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Maple Leaf Cement Factory Limited (MLCF): Higher costs drag earning

 

 

29 May 2018

Azee Securities (Pvt.) Ltd.

 

 

  • In our today's morning report we would discuss the performance of Maple Leaf Cement Factory Limited (MLCF) in 9MFY18.
  • Despite higher domestic sales, the profit after taxation (PAT) of MLCF fell by 30% YoY owing to higher coal prices, lower cement prices, and surge in finance cost. The PAT of the company totaled Rs 2.85 billion (EPS: Rs 4.81) in 9MFY18 versus a PAT of Rs 4.05 billion (EPS: Rs 6.82) in 9MFY17. The finance cost of the company observed a hefty hike of 201% YoY in 9MFY18 to Rs 559 million as against Rs 186 million in 9MFY17 owing to mark-up on debt raised to finance power project.
  • The net revenue of the company reached Rs 19.31 million in 9MFY18 growing by 6% YoY up from Rs 18.29 billion in the identical period in FY17 on back of growing domestic sales. However lower cement prices restricted the revenue growth. On the other side due to higher coal prices, the cost of sales of the company observed 23% YoY hike in 9MFY18 to Rs 13.09 billion as against Rs 10.67 billion in 9MFY17. However, the Company partially derived benefit of relatively lower coal prices throughout the current period on account of utilization of coal inventory which was built up at relatively lower prices. Therefore gross profit of the company fell by 18% YoY in 9MFY18 to Rs 6.22 billion as against Rs 7.62 billion in 9MFY17. Consequently, gross profit margin of the company reduced to 32.2% in 9MFY18 versus 41.7% in 9MFY17.

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