Lucky and Maple Leaf Cement full year result expectations

Lucky Cement (LUCK) is scheduled to announce full year financial results for FY15 tomorrow (8th September). Analysts expect the Company to post profit after tax (NPAT) of Rs3.05 billion (EPS: Rs9.44) as compared to net profit of Rs3.16 billion (EPS: Rs9.77), down 3%YoY. The decline in earnings is expected to be led by higher effective tax rate of 27.7% for 4QFY15 as against 22.2% for 4QFY14 primarily due to the imposition of super tax. However, on a pre-tax basis, the company is expected to exhibit a growth of 4%YoY underpinned by a likely 170bps YoY appreciation in gross margin to 44.7% during 4QFY15 due to lower coal prices ( down 23%YoY)  amid stable cement prices. LUCK’s top-line is likely to remain flat at to Rs11.7 billion as 12%YoY decline in export volumes overshadowed the growth in local dispatches (up 7%YoY). LUCK is likely to expense out Rs300 million under GIDC for gas utilized during the quarter under review. However, analysts expect no provision to be made for prior settlement (estimated around Rs680 million) as the case is still pending in the court. FY15 net earnings are expected to grow to Rs12.36 billion (EPS: Rs38.21) as compared to Rs11.34 billion (EPS: Rs35.08) for FY14, up 9%YoY. Along with the results, LUCK is expected to announce a payment of Rs10.0/share dividend.

Maple Leaf Cement (MLCF) is scheduled to announce its FY15 earnings on Wednesday (9th September). The Company is expected to post NPAT growth of a stellar 145%YoY to Rs1.03 billion (EPS: Rs1.94) as compared to net profit of Rs0.42 billion (EPS: Rs0.79) during same period last year. On a pre-tax basis, the earnings are likely to go up by 21%YoY. Earnings are likely to be driven by: 1) lower assumed effective tax rate of 26.7% (super tax incorporated) for 4QFY15 against 63.8% charged in 4QFY14 on account of provision of annual ACT for fourth quarter of last financial year, 2) top-line growth of 6%YoY was underpinned by likely 9%YoY growth in local dispatches along with stable product prices, 3) expected 150bps improvement in gross margin to 38.8% where a likely provision in respect of GIDC amounting to Rs73 million is expected to restrict growth and 4) reduced borrowing costs fueled by sizable deleveraging and lower interest rate environment. Consequently, FY15 net earnings are expected to grow to Rs3.37 billion (EPS: Rs6.39) as compared to net profit of Rs2.83 billion (EPS: Rs5.36), up 19%YoY. Alongside the results, MLCF is also expected to announce dividend of Re1.00/share, in addition to Re1.00 already paid during 1HFY15.

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