AKD Securities Limited – Result Review

Karachi, January 27, 2015 (PPI-OT): MLCF: 1HFY15 Result Review

Maple Leaf Cement (MLCF) has announced its 2QFY15 results in which the company posted net earnings of PKR888.2mn (EPS: PKR1.68), registering a muted decline of 4.1%YoY against NPAT of PkR926.2mn (EPS: PkR1.76) in 2QFY14. This was against AKD Securities Limited’s projected 2QFY15 NPAT of PkR813.9mn (EPS: PkR1.54). As a result, 1HFY15 earnings clocked in at PkR1,433.6mn (EPS: PkR2.72), down by 3%YoY. This reduction was largely a result of 25.9% effective tax (ACT); on a pre-tax basis, 1HFY15 earnings were up by 31%YoY. Alongside the result, MLCF announced a dividend of PkR1/share.

Key highlights of the 2QFY15 result were: 1) 12%YoY growth in top-line, 2) 130bps jump in GM to 36.6% vs. 35.3% in 2QFY14, and 3) decline in finance cost by a sharp 29%YoY.

Having gained 14% CYTD, MLCF trades at a forward P/E multiple of 7.6x. AKD Securities Limited an Accumulates stance on the scrip where AKD Securities Limited’s liking is due to both favourable cement sector dynamics and the company’s own turnaround. AKD Securities Limited’s TP of PkR56/share offers 17.1% upside where AKD Securities Limited flags the company as a significant beneficiary of lower interest rates (D/E: ~70%).

MLCF: Income Statement

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