Engro Polymers and Chemicals: profit plunges 33% as high finance costs bite

Engro Polymers and Chemicals Limited (EPCL), a subsidiary of Engro Corporation Limited, saw its profit-after-tax fall to Rs1.56 billion during the quarter ended June 30, 2023, down over 33% compared to profit of Rs2.34 billion in the same period last year.

Its Board of Directors in a meeting held on Wednesday reviewed the financial performance of the company for the period ended June 30.

EPCL’s gross profit stood at Rs5.45 billion in the quarter, as compared to Rs7.53 billion, a drop of nearly 28%.

Net sales decreased by nearly 15% to Rs19.04 billion as compared to Rs22.27 billion recorded in the previous year. Cost of sales declined to Rs13.59 billion, compared to Rs14.75 billion recorded in the same period last year.

Meanwhile, finance costs jumped from Rs737.23 million to Rs1.56 billion, a yearly increase of over 52%. This increase can be attributed to a rise in interest rate during the period.

Income-before-tax fell over 38%, clocking in at Rs3.41 billion as compared to Rs5.52 billion in the same period last year.

The board announced an interim cash dividend for ordinary shareholders for the period of Rs1.50 per share i.e. 15%. This is in addition to interim cash dividend already paid at Rs1.00 per share i.e. 10%.

The board also approved an interim cash dividend for preference shareholders for the period ended June 30, 2023, Rs0.50 per share i.e. 5%. This is in addition to interim cash dividend already paid at Rs0.50 per share i.e. 5%.

The company’s earnings per share (EPS) basic stood at Rs1.39 per share, against Rs2.45 per share in the same period last year.

EPCL is a manufacturer of Poly Vinyl Chloride, Vinyl Chloride Monomer, caustic soda and other related chemicals. The company is also engaged in the supply of surplus power generated from its power plants to Engro Fertilizers Limited.