Engro Polymer & Chemicals Ltd. (EPCL) announced its 4QCY25 financial results, wherein the company reported a loss of PkR446mn (LPS: PkR0.5) compared to a profit of PkR2.1bn (EPS: PkR1.8) in SPLY. The loss was primarily due to the absence of a tax reversal that had supported earnings in the SPLY. The result largely matched our expectations.

·        Company’s revenue declined by 4%YoY at PkR20.0bn, due to a 19% YoY drop in PVC prices despite higher expected offtakes.

·        Gross margins contracted to 5.5% during the quarter from 14.1% in SPLY, mainly due to the aforementioned decline in prices and higher gas tariffs. Notably, margins in the SPLY were also supported by lower depreciation expense following a reassessment of the useful life and residual value of plants.

Courtesy – AKD Research