Karachi, August 10, 2023 – Engro Polymer and Chemicals Limited (EPCL) has encountered a substantial 61 percent drop in profit after tax for the half-year ending June 30, 2023.
This sharp decline in net profit can be primarily attributed to the reduction in international PVC prices, which has significantly impacted the company’s financial performance.
According to the financial results submitted to the Pakistan Stock Exchange (PSX) on Thursday, the company reported a profit after tax of Rs 2.75 billion for the first half of 2023, compared to Rs 7.05 billion in the same period the previous year. This drastic reduction in earnings has also led to a decline in both basic and diluted earnings per share (EPS), which stood at Rs 2.67 and Rs 2.27, respectively, for the half-year ended June 30, 2023, compared to Rs 7.55 and Rs 5.83 in the corresponding period the previous year.
The board of directors of EPCL, in a meeting held on August 9, 2023, recommended an interim cash dividend for ordinary shareholders at the rate of Rs 1.50 per share, totaling 15.00%. This is in addition to the interim cash dividend already paid at Rs. 1.00 per share, totaling 10%. Additionally, an interim cash dividend of Rs 0.50 per share, amounting to 5.00%, was recommended for preference shareholders, also in addition to the interim cash dividend already paid at Rs. 0.50 per share, totaling 5.00%.
Consolidated financial results revealed a decline in revenue from contracts with customers, which fell to Rs 37.02 billion during January – June 2023, compared to Rs 45.40 billion in the same period the previous year. Industry analysts have attributed this decrease in revenue to a sharp 60 percent decline in PVC prices.
Furthermore, the company’s gross profit for the half-year ended June 30, 2023, was reported at Rs 9.04 billion, compared to Rs 15.19 billion in the same period the previous year. The impact of the reduction in PVC prices on overall profitability has been a significant challenge for EPCL.
As EPCL navigates these challenging market conditions, investors and stakeholders are keenly observing the company’s strategies to mitigate the effects of the global PVC price reduction. The prudent management of resources and market dynamics will play a crucial role in determining the company’s future financial performance.
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