Mapleleaf cement announced its half yearly accounts for FY17 with a 10 percent bump to its net revenues clocking at Rs11.97 billion in 1HFY17 against Rs10.86 billion this period last year. The company also declared an interim cash dividend for the quarter ending December 2016 at Rs2 per share i.e.20 percent.
The company has been running on a production capacity of 3.2 million tons, contributing to about 7 percent of the total cement production across the industry. Keeping in line with other expansions coming through in the industry, Mapleleaf will also be expanding with a brownfield expansion of 7,300 tons per day (approximately 2.2 million tons annually) at an estimated cost of Rs20 billion. This new line will start operations in FY19. With the new line, the company could take up its production capacity share in the market to 9 percent.
As far as the current financial results are concerned, margins improved from 41 percent to 43 percent between 1HFY16 and 1HFY17. Since costs are increasing with a rebound to coal prices, improving margins is a good sign and can be attributed to the energy efficiency efforts of the company. Margins are likely to remain at these levels through the fiscal year.
Finance cost declined due to early debt retirement while other indirect expenses (distribution, administration etc.) together saw a 21 percent increase year-on-year. The bottomline grew by 15 percent, going up from Rs2.3 billion to Rs2.69 billion in 1HFY17. The net profit margin improved only marginallyfrom 22 percent to 23 percent.
The company also has a 40 MW of coal fired power plant in the works that is expected to start operations toward the end of FY17 which would further help loosen pressure from costs. Outlook for Mapleleaf remains optimistic for now.
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