Islamabad, Oct 22; Engro Polymer Posts Rs. 2.28 Billion Loss for First 9 Months of 2024
In its 9MCY24 financial results, which were released today, Engro Polymer & Chemicals Limited (EPCL) reported a loss of Rs. 2,288 million (LPS: PKR 2.52) as opposed to a profit of Rs. 5,386 million (EPS: PKR 5.93) in SPLY. In contrast, the loss for 3QCY24 was Rs. 698 million (LPS: PKR 0.77).
In 9MCY24, net sales came to Rs. 54.5 billion, a 12% YoY decrease. Additionally, during 3QCY24, the top line fell 20% year over year to Rs. 20.1 billion. According to Arif Habib Limited, the reason for this dip is the drop in PVC costs, which decreased by 3% year over year in USD terms.
Due to lower PVC margins and higher gas prices, the gross profit margin in 9MCY24 was 6.6% as opposed to 25.6 percent in SPLY. For the reasons outlined above, the gross margins for the quarter dropped to 5.5 percent, a 20-percentage point decrease year over year.
During 3QCY24, the finance cost increased by 59% year over year to Rs. 1,964 million due to an increase in short-term borrowings. Due to a drop in interest rates, the finance cost decreased by 8% year over year on a sequential basis.
During 3QCY24, other income fell 48 percent year over year to Rs. 194 million as a result of fewer short-term investments.
In comparison to the taxes of Rs. 1,769 million in 3QCY23, the company recorded a tax reversal of Rs. 749 million in 3QCY24.
It is anticipated that PVC margins would continue to be limited as a result of the global economic downturn and poor building activity. The profitability of EPCL is at danger from this trend since it will be hampered by lower product prices brought on by deteriorating demand fundamentals.
