Engro Polymer (EPCL) Q1 earnings review

EPCL - Financials
Posted by: KSEStocks News 1

Engro Polymer (EPCL) Q1 earnings review

Foundation Securities Pvt Ltd has just released an update on Engro Polymer & Chemicals Limited’s (EPCL) recent quarterly results. Here are the important points from the EPCL earnings announcement:

Overview

EPCL, a key player in the chemical industry, faced challenges in the first quarter of CY24. The company reported a loss per share (LPS) of Rs0.65, marking a significant decline compared to the same period last year.

Factors Impacting Performance

PVC-Ethylene Margin Decline

EPCL’s profitability took a hit due to a 30% year-over-year decrease in PVC-Ethylene margin. This decline, with an average margin of US$303/ton during 1QCY24, compared to US$433/ton in the same period last year, contributed to the negative performance.


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Rise in Administrative Expenses

Administrative expenses surged by 147% year-over-year, primarily due to high inflation experienced during the preceding year, adding pressure to EPCL’s financials.

Other Expense Reduction

While other expenses declined significantly by 97% year-over-year in 1QCY24, compared to the same period last year, this was attributed to lower foreign exchange losses and reduced expenses amid lower profitability.

Financial Costs

EPCL witnessed a 42% year-over-year increase in finance costs during the first quarter of CY24, driven by a 28% rise in borrowing and record-high interest rates.


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Outlook

The outlook remains challenging for EPCL. With global economic slowdown impacting PVC prices and PVC-Ethylene International margin expected to remain range-bound, EPCL’s profitability may face further pressure.

Financial Highlights

Here are the financial highlights for Engro Polymer & Chemicals Limited (EPCL) in the first quarter of CY24:

Rs (Million)1QCY241QCY23YoY ChangeQoQ Change
Net Sales16,56517,978-8%-14%
Cost of Goods Sold15,50014,3878%10%
Gross Profit1,0643,591-70%-79%
Distribution & Marketing Expenses1421420%-64%
Administrative Expenses677274147%-6%
Other Expenses21764-97%-124%
Other Income285438-35%-49%
Finance Cost1,6641,17042%605%
Profit Before Tax (PBT)(1,156)1,678-169%-126%
Tax(371)489-176%-153%
Profit After Tax (PAT)(784)1,189-166%-121%
EPS – Basic(0.86)1.14
EPS – Diluted(0.65)0.86
DPS – Ordinary1.00
DPS – Preference0.50
Gross Margin6.4%20.0%
Net Margin-4.7%6.6%
Effective Tax Rate32.1%29.1%
Source: PSX, Company Accounts, Foundation Research, April 2024

Disclaimer:
The information in this article is based on research by Foundation Securities Pvt Ltd. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →

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