Maple Leaf Cement sees rising profit in 1H14

Maple Leaf Cement has released its Half Yearly Report (ended 31 December 2013).

1H14 results

• Net sales improved to Rs.8,844 million in 1H14, compared to net sales of Rs.8,175 million in 1H13.
• Sales revenue improved by 8% y/y, resulting in growth in gross profit – mainly due to higher local prices, on account of increased input costs due to power tariff hike and a rise in international prices of coal.
• Gross profit increased to Rs.2,996 million in 1H14, against Rs.2,745 million in 1H13.
• Operating profit for the period stood at Rs.2,333 million, as compared to Rs.2,208 million in 1H13. Operating earnings growth emanated mainly from better cement prices and efficient running of the company’s waste heat recovery plant, along with other cost reduction measures.
• Local dispatches improved in 2Q14 compared to 1Q14 on account of an increase in construction activity in the private and public sectors, due to higher utilisation of funds released as part of the Public Sector Development Programme.
• Export quantities and retention, on the other hand, reflected a flat trend during 1H14 due to lower demand in export markets.
• There was a decline of 8% in financial charges, despite Pak Rupee devaluation, due to a reduction in interest rates, deleveraging and improved cash management. The company is continuing to repay Sukuk/Syndicate and other debt obligations and is dedicated to keep current on all debt commitments backed by better cash flows and efficient cash management.
• Due to above factors, Maple Leaf Cement has shown a profit after tax of Rs.1,482 million in 1H14, against Rs.1,350 million in 1H13.

Outlook

Maple Leaf Cement has hopes for expanded pace in spending on public sector infrastructure projects in the second half of the current fiscal year. Upbeat demand is expected to keep cement prices stable and should result in good profitability. The company has adopted efficient marketing techniques to discover new export markets to achieve better capacity utilisation. The export market in Afghanistan is declining on account of availability of low cost Iranian cement, which is a worrying factor. Exports to India have also declined. Cost reduction efforts continue to be the main focus in all operational areas and the company has adopted various strategies to reduce costs, including the use of alternative fuels and optimised operations of the plant.

Read Maple Leaf Cement’s Half Yearly Report, 31 December 2013, here.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldcement.com/asia-pacific-rim/28022014/maple_leaf_cement_sees_rising_profit_in_1h14_826/