ISLAMABAD, AUGUST 16: Engro Polymer & Chemicals (EPCL) reported a combined loss of Rs. 688 million for the second quarter of 2024. Due to this, the 1H2024 loss was reduced to Rs. 1.6 billion from the Rs. 2.7 billion profits in 1H2023. According to Topline Securities, the 2Q2024 loss exceeded industry projections because financing expenses were more than anticipated.
The financing cost for the second quarter of 2024 was Rs. 2.1 billion, which increased by 37% YoY and 27% QoQ as a result of increasing borrowings. Due to decreased PVC pricing (US$ 810/MT vs. US$ 830/MT in 2Q2023), the company’s net sales decreased by 6% YoY to Rs. 17.8 billion in 2Q2024.
Gross margins decreased to 8% in 2Q2024 from 30% in 2Q2023, mostly as a result of higher gas costs and lower primary margins. Gross margins increased 163 basis points on a quarter-over-quarter basis, as opposed to 7.3 percent in 1Q 2024. In comparison to US$ 309/MT in the previous quarter and US$ 385/MT in 2Q2023, the core delta for 2Q2024 stayed at US$ 318/MT.
Due primarily to the inflationary environment, distribution expenses grew by 33 percent/29 percent YoY/QoQ to Rs. 185 million.
In 2Q2024, other income dropped by 64 percent/32 percent YoY/QoQ to Rs. 120 million, presumably as a result of a decline in interest rates and a reduction in short-term investments. Similarly, in 2Q2024, other costs dropped 92% YoY as there was no exchange loss during that time. In contrast to the taxes of Rs. 1.85 billion in 2Q2023, EPCL had a tax reversal of Rs. 639 million in 2Q2024.
In H1 2024, the business reported an LPS of Rs. 1.75 and in 2Q2024, a loss per share of Rs. 0.76.
At the time of filing, EPCL’s scrip at the bourse was Rs. 39.36, down 5.32 percent or Rs. 2.21 with 1.8 million shares on Friday.
