Maple Leaf Cement Factory Limited: Result Previews; MLCF & MCB

By: WE Financial Services Limited

In our today’s morning briefing we would present forecast on the upcoming corporate results of Maple Leaf Cement Factory Limited (MLCF) and MCB Bank Limited (MCB) as their meeting of the board of directors is scheduled to be taken on Oct 19 and Oct 20, 2015 respectively.

MLCF: Year to begin with strong growth On the back of higher volumetric sales, reduced coal prices, and lower effective taxation, the PAT of MLCF is expected to post a massive growth of 57% YoY in 1QFY16 to Rs854 million (EPS: Rs1.62) as compared to a PAT of Rs545 million (EPS: Rs1.03) in 1QFY15.

In addition to above mentioned factors, the profitability of the company would also boosted by decline in finance cost. With the support of 5% higher volumetric sales, the net revenue of the company is likely to total Rs4,883 million in 1QFY16 which is 10% YoY up from Rs4,453 million in 1QFY15. Due to better primary margins, the gross profit is expected to increase by 14% YoY in 1QFY16.

MCB: Double digit growth in earning foreseen The bottom-line of MCB is expected to post a decent growth of 16% YoY in 9MCY15 on back of higher interest and non-interest income. The PAT of the bank is anticipated to total Rs20,970 million (EPS: Rs18.84) in 9MCY15 versus a PAT of Rs18,124 million (EPS: Rs16.28) in 9MCY14. The bottom-line of the bank would also supported by reversal in provisions against NPL worth Rs873 million. The interest income of the bank to grow by 9% YoY in 9MCY15 to Rs62,052 million while the interest expense to decline by 1% YoY in 9MCY15 to Rs24,509. Therefore, the net interest income (NII) would climb by 17% YoY in 9MCY15 to Rs37,544 million versus Rs32,014 million in the identical period in CY14.

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On the other side due to higher income from fee, commission & brokerage, and capital gain on sale of securities, the non-interest income is likely to rose by 45% YoY in 9MCY15 to Rs13,847 million versus Rs9,550 million in 9MCY14. The corporate results are anticipated to be accompanied with a third interim cash dividend of Rs4/share in addition to the already paid cash dividend of Rs8/share during 1HCY15.