Engro Polymer (EPCL) announced its 3Q2021 financial results today, where the company booked a consolidated profit of R3,107mn (EPS: Rs3.42) compared to Rs1,881mn (EPS: Rs2.07) in 3Q2020.

It takes 9M2021 earnings to Rs10,372mn (EPS: Rs11.41) compared to Rs2,103mn (EPS: Rs2.31) in 9M2020.

The earnings came in in line with our and industry expectations.

Along with result, company announced interim cash dividend of Rs3.00/share, taking 9M2021 payout to Rs10.8/share.

Net sales of the company increased by 87% YoY to Rs18,827mn during the quarter, primarily due to higher volumetric sales and higher PVC prices.

Gross Margin declined by 4.1ppts YoY to 27.8% in 3Q2021 from 32.0% in 3Q2020, which is lower than our estimate most likely due to higher freight cost.

Distribution and marketing expenses increased by 2% YoY to Rs90mn due to higher volumetric sales.

Other Expenses significantly increased by 669% YoY to Rs789mn compared to Rs103mn, which we believe is attributable to unwinding of GIDC gain.

Effective tax rate of the company clocked in at 25% in 3Q2021 vs. 30% in 3Q2020.

Courtesy – AHCML Research