Maple Leaf Cement Surges with Strong Q2 Earnings Boost

Lahore: Maple Leaf Cement Factory Ltd. (MLCF) has reported a significant increase in its financial performance for the second quarter of fiscal year 2025, with consolidated profits rising to PkR3.7 billion, marking a 67% year-over-year growth. The company attributes this rise to improved gross margins, increased other income, and reduced taxation.

According to a statement by AKD Securities Limited, MLCF’s revenue for the quarter reached PkR19.0 billion, reflecting a 5% increase compared to the same period last year. This growth was primarily driven by higher retention prices, which offset the impact of a 6% decline in offtakes. The company noted that the improved retention prices were largely due to increased sales of white cement and hdPutty.

Gross margins saw an uplift, increasing to 39.8% from 35.3% in the previous year, aided by the higher retention prices and a reduction in weighted average coal prices. Additionally, distribution expenses witnessed a notable decline, falling by 37% to PkR1.0 billion, attributed to decreased branding and sales promotion costs.

Other income experienced a remarkable surge, increasing 16.4 times year-over-year to PkR1.2 billion. Conversely, the finance cost rose by 55% to PkR1.4 billion. The company expanded its short-term borrowings by PkR32.4 billion while also increasing short-term investments by PkR37.0 billion during the quarter.

MLCF recorded an effective tax rate of 27% for the quarter, compared to 23% in the same period last year and 36% in the first quarter of FY25. The first half of FY25 saw earnings totaling PkR5.1 billion, a 31% increase from PkR3.9 billion in the previous year.

AKD Securities Limited maintains a ‘BUY’ stance on MLCF, setting a target price of PkR70 per share for December 2025. The positive outlook is based on the company’s enhanced margins, driven by cost efficiencies and the expanding share of high-margin products like white cement and hdPutty.

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