Engro Polymer & Chemicals reports higher gas prices and a decline in PVC margins, which results in a loss after tax.

Engro Polymer & Chemicals Limited (EPCL) announced its 1QCY24 financial result today, where the company posted a loss of PKR 901mn (LPS: PKR 0.99) compared to PKR 1,183mn (EPS: PKR 1.30) and PKR 3,951mn (EPS: PKR 3.90) in 1QCY23 and 4QCY24, respectively.

Result Highlights

Net sales during 1QCY24 reduced by 8% YoY to PKR 16,572mn amid decline in PVC volumes. On a QoQ basis, the topline tumbled by 14% YoY due to the aforementioned reason.

The gross profit margin in 1QCY24 arrived at 6.4% compared to 20.0% during SPLY due to higher gas prices and subdued PVC margins.

The finance cost climbed up by 42% YoY, arriving at PKR 1,668mn during 1QCY24 amid higher interest rates and a jump in short-term borrowings. On a sequential basis, the finance cost surged by 7x YoY, which is attributable to higher short-term borrowings.

Other income plummeted by 61% YoY to PKR 175mn during 1QCY24 due to lower short-term investments.

The other expenses plunged by 97% YoY to PKR 23mn in 1QCY24, which is mainly on the back of absence on exchange loss in the quarter.

The company booked a tax reversal of PKR 371mn in 1QCY24 compared to taxation of PKR 489mn in 1QCY23.

Courtesy – AHL Research 

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