EPCL earnings are expected to increase in 2QCY21

Engro Polymer & Chemicals Limited (EPCL) is scheduled to announce its financial results for 2QCY21 on Aug 10th, 2021. We expect the company to post profit after tax of PKR 4,789mn (EPS: PKR 5.27), up by 160x YoY during 2QCY21 compared to PKR 30mn (EPS: PKR 0.03) during 2QCY20. The rise in earnings is expected due to 115% increase in PVC margins to an average of USD 959/ton along with low base of production during 2QCY20 on account of lockdown.

During 2QCY21, sales are expected to jump up by 172% YoY due to higher production along with higher PVC prices. Gross margins are expected to increase by 37pps to 46% due to 115% YoY rise in PVC margins.

Due to lower interest rates, finance costs are expected to decrease by 27% YoY to PKR 436mn. We also expect the company to announce a cash dividend of PKR 1.00/share.

Engro Polymer & Chemicals Limited (EPCL) is the sole manufacturer of PVC resin in Pakistan. Besides this the company also produces Chlor Alkali products

Courtesy – AHL Research

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