Engro Polymer Profits Drop by Massive 61% in First Half of 2023

Engro Polymer and Chemicals Limited (PSX: EPCL) has posted a profit after tax (PAT) of Rs. 2.74 billion for the half year that ended on June 30, calendar year (CY) 2023.

According to the company’s consolidated financial results, profits dropped by 61 percent year-over-year (YoY) as compared to Rs. 7 billion in the same period last year. For 2QCY23, EPCL posted a PAT of Rs. 1.56 billion, down by 33 percent YoY.

The decline in earnings is due to lower international PVC margins, higher finance costs, and gas prices, according to Arif Habib Limited (AHL).

Along with the result, EPCL announced a final cash dividend of Rs. 1.5 per share for the half year, taking the 1HCY23 dividend to Rs. 2.5 per share.

Net sales of the company decreased by 18 percent YoY to settle at Rs. 37 billion during 1HCY23. During 2QCY23, net sales witnessed a decline of 15 percent YoY to settle at Rs. 19 billion amid lower PVC prices (-41 percent YoY).

Other expenses declined by 73% 2QCY23 | 47% 1HCY23 attributable to lower exchange losses.

Other income also decreased by 9% 1HCY23 | 21% 2QCY23 due to a decline in investment levels.

Finance costs during 2QCY23 increased by 110 percent YoY to Rs. 1.55 billion in lieu of higher interest rates. Meanwhile, the same metric dumped 102 percent YoY in 1HCY23 to Rs. 2.72 billion from Rs. 1.35 billion in SPLY.

Gross margins of the company went down by 516bps YoY to 29 percent during 2QCY23 owed to higher gas prices along with depressed PVC margins (-50 percent YoY). However, 32 percent YoY PKR depreciation during the quarter cushioned the decline.

The company reported earnings per share (EPS) of Rs. 3.02 in 1HCY23 and an EPS of Rs. 1.72 reported in 2QCY23.

At the time of filing, EPCL’s scrip at the bourse was Rs. 42.16, down 1.19 percent or Rs. 0.51 with a turnover of 1,459,052 shares on Thursday.

Source: Pro Pakistani

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