
Displaying items by tag: Maple Leaf
Maple Leaf Cement reports first quarter of 2024 results
11 September 2024Pakistan: Maple Leaf Cement has reported a consolidated profit after tax of US$5.6m for the quarter ending June 2024, with sales revenue increasing by 5% to US$56.4m from US$53.8m year-on-year. The cost of sales dropped by 10%, boosting the gross profit by 44% year-on-year to US$21.7m.
Pakistan: Maple Leaf Cement recorded US$182m in sales in the first nine months of 2024, up by 8% year-on-year from US$169m in the first nine months of the previous financial year. Its cost of sales also rose by 8%, to US$124m from US$115m. As such, the producer recovered a profit after tax of US$19.3m, down by 13% from US$22.2m.
Maple Leaf Cement concluded a buyback of its shares on 24 April 2024, giving the company revised paid-up capital of US$37.7m.
Pakistan: Maple Leaf Cement’s first-half standalone sales were US$121m in the 2022 financial year, down by 33% year-on-year from a first-half 2021 financial year figure of US$91.5m. Export sales fell by 46% to US$2.63m, 2.5% of total sales. Its main export markets were Afghanistan, the Seychelles, Oman and Tanzania. The company reported a 70% increase in its consolidated net profit to US$15.2m from US$8.97m in the first half of the 2021 financial year. The producer said that it expects the domestic cement market to remain ‘stagnant’ for numerous reasons, including high inflation, increased interest rates and decelerating implementation of projects under the Public Sector Development Programme.
Update on Pakistan, March 2022
16 March 2022Cement producers in the north of Pakistan have started to increase their use of coal from Afghanistan in response to the ongoing volatility in energy markets. Research from a report by Darson Securities found that companies were already using up to 70% Afghan coal in their fuel mix with a further 20% being considered. Most of the northern producers are reported to have secured the cheaper Afghan coal for about two months of inventory, although Maple Leaf Cement was said to have four to five months of inventory. Meanwhile in the south of the country, producers were reported to be facing a tougher situation as Afghan coal costs more for them due to higher logistics charges and export orders were being reduced due to the low cost of clinker internationally. So they are focusing on the domestic market instead.
Graph 1: Cement despatches in Pakistan, 2015 – 2021. Source: All Pakistan Cement Manufacturers Association.
Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that cement despatches have been steadily growing since the mid-2010s with a blip in 2020 caused by the start of the Covid-19 pandemic. The upward trend has been driven by local sales. Exports have generally grown at the same time, with more variance, but they are yet to regain the high of nearly 11Mt reported in 2009. On a rolling annual basis, local sales have remained steady since mid-2021 but exports have been slowly falling. In April 2021 they were 9.17Mt but by February 2022 they were 7.33Mt. For the February 2022 figures APCMA blamed this on the growing cost of production, rising international freight rates, mounting coal prices and a trade ban with India. On that last point for example, Pakistan-based producers exported 1.21Mt of cement to India in the 2017 – 2018 financial year before exports stopped after February 2019. Despite a brief respite in the spring of 2021 talks are still ongoing to resume trade with India.
On the corporate side the country’s largest cement producer by capacity, Lucky Cement, drew the same conclusion as the APCMA with its half-year results to 31 December 2021. Its local sales volumes were down a little but its exports were down a lot. It noted that the reason its local sales were falling but national industry local sales were up slightly was due to some competitor plants being non-operational in the previous year. However, the company managed to keep sales revenue and earnings increasing year-on-year by successfully combating growing input costs with price rises. Bestway Cement, the country’s other large producer, reported a tougher situation in the second half of 2021, with both local sales and export volumes down. This was attributed to a boom in construction activity in the second half of 2020 as Covid-19 lockdowns were eased. Demand for cement since then was said to be ‘sluggish’ due to inflation and high commodity prices. It also pinned its marked fall in exports on political and economic instability in Afghanistan. However, turnover and operating profit were both up due to higher selling prices.
Elsewhere in the sector news since the start of 2021, Pakistan’s exports to South Africa remained stymied in early 2020 due to a review of ongoing tariffs and the government decision to restrict infrastructure projects to only using locally produced cement. On the sustainability front the APCMA started to set out its decarbonisation strategy in November 2021. It may have a long way to go given that a think tank reported earlier in the year that the cement sector was the largest emitter of coal-related CO2 emissions in the country, even more than power generation. Alongside this plenty of capacity additions have been announced. Lucky Cement started commercial cement production at its 1.2Mt/yr integrated Samawah cement plant in March 2021. Various new cement plants and upgrades to existing plants have been proposed by Bestway Cement, Cherat Cement, Fauji Cement, Kohat Cement Company, Lucky Cement and Maple Leaf Cement. Finally of note to a sector troubled by energy prices, in September 2021 the Pakistan International Bulk Terminal said it was going to upgrade its coal handling capacity to around 17Mt/yr by 2024.
Last week’s Global Cement Weekly covered Turkey. The contrasts are interesting because both of these countries have high cement exports and have raised energy concerns recently. This leads to the question of whether other cement exporters may be vulnerable to the current situation. Pakistan isn’t the only country where the cement industry is facing the negative effects of growing energy costs. This week in the sector news, Spain-based Tudela Veguín has shut down the kiln at its La Robla plant down for 10 days due to high electricity prices, Thailand-based Siam Cement Group (SCG) announced it was reviewing its investment plans and the UK-based Mineral Products Association lobbied the government on the issue.
The shift to Afghan coal by Pakistan’s cement producers is rational given the current situation. No doubt fuel buyers all over the world are doing similar things. In January 2022 the International Monetary Fund (IMF) forecast that Pakistan’s gross domestic product would grow by around 4% for 2021, 2022 and 2023 but current geopolitical events may test these estimates. Over the last year domestic cement demand has remained strong but inflation, growing input costs and the impetus to further rise prices may change this. Meanwhile, lots of new production capacity is in the pipeline and, if or when it is built, it may add additional competition pressure. This may present a problem in Pakistan if capacity utilisation levels drop but input costs keep on going up.
Pakistan: The government of the Punjab will charge cement producers in the state up to US$0.93/m3 for ground water used in their cement production. The Dawn newspaper has reported that the charge will depend on water availability, and be US$0.6/m3 in water secure areas, US$0.85/m3 in semi-critical areas and US$0.93/m3 in critical areas most affected by drought. The measure aims to encourage rainwater harvesting in order to preserve water tables. The charges will fall upon Maple Leaf Cement, Gharibwal Cement, Dandot Cement, Flying Cement, Askari Cement and Fauji Cement. They will remain in force until the establishment of a Punjab Water Services Regulatory Authority and its enactment of water extraction rates.
Maple Leaf Cement returns to profit in 2021
17 August 2021Pakistan: Maple Leaf Cement’s sales rose by 22% year-on-year to US$216m in the financial year to 30 June 2021 from US$177m in the same period in 2020. It reported a profit after tax of US$23.2m compared to a loss of US$21.6m previously.
Pakistan: Descon Engineering says it has been awarded the construction contract for Maple Leaf Cement’s new 7000t/day production line at its integrated Iskanderabad plant. Line 4 is scheduled to be commissioned in mid-2022. China-based Chengdu Design & Research Institute of Building Materials Industry was awarded the equipment and engineering contact for the project in April 2021. Descon Engineering previously contributed towards the work on Line 3 at the unit in conjunction with Denmark-based FLSmidth in 2019. No value for the order has been disclosed.
Pakistan: Maple Leaf Cement has commenced operations at clinker line 3 of its Iskanerabad cement plant following a modification to increase capacity. The Dawn newspaper has reported that the plant now has a capacity of 18,500t/day of grey clinker, up by 3% from 18,000t/day previously.
Pakistan: The National Forum for Environment and Health has awarded Maple Leaf Cement the Corporate Social Responsibility Award 2021 for its contributions to environment and community. The Business Recorder newspaper has reported that the company says it encourages a ‘positive impact’ on the environment, employees, community and all other stakeholders through its activities.
Pakistan: The Institute of Chartered Accountants of Pakistan (ICAP) and the Institute of Cost and Management Accountants of Pakistan (ICMAP) have named Maple Leaf Cement the winner of Best Corporate Report Award Cement 2020 for its company coverage.
ICAP and ICMAP said, “The objective of corporate reporting is to be easily understood by all the stakeholders as well as showing utmost transparency. Considering these golden rules, Maple Leaf Cement, which has always accepted corporate accountability being its primary goal, is the best in category.”
Lucky Cement won runner up for the award.