PACRA Maintains Entity Ratings of Maple Leaf Cement Factory Limited

Lahore, December 07, 2018 (PPI-OT): The ratings reflect Maple Leaf’s strong business profile supplemented by (i) sizable market share, (ii) recognized brand, and (iii) strong profitability. The company operates at 3.4mln tpa capturing market share of 6.2%. The Company’s capacity expansion of 2.1mln tpa is at an advanced stage (expected CoD in 3QFY19) which will assist in defending existing market share. The promising investment in Maple Leaf Power (40MW coal based power plant) would assist company in reaping cost efficiencies.

During FY18, industry margins witnessed decline due to low retention prices, fluctuating international coal prices and lately increased import duty on coal. Nevertheless, the company’s capacity utilization continued to stay at optimal level for existing capacity which abetted in company’s healthy topline and cashflows.

In pursuit of expansion, the company’s leveraging increased but expected to remain range bound. The improvement in financial risk matrix is considered essential for the ratings. The ratings recognize the company’s seasoned management team, having sound technical stature and quality support infrastructure.

The ratings are dependent on upholding of company’s market position along with sustenance of business volumes and margins. Company’s long term debt repayment is important to improve financial risk matrix. The company’s strong business performance in current stretched economic scenario – challenges on demand front – remains vital for ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com