EPCL loss widens 24x in FY25

February 16, 2026 (MLN): Engro Polymer & Chemicals Limited (PSX:EPCL) reported a net loss of Rs3.90bn for the year ended December 31, 2025, which widen 24.3 times from the Rs160.6m loss recorded in the previous year.

The company's loss per share increased to Rs4.29 from Rs0.40 in the corresponding period.

The polymer and chemicals manufacturer's revenue from contracts with customers increased 3% year-on-year to Rs78.02bn from Rs75.71bn, demonstrating modest top-line growth.

Cost of sales rose 6% to Rs73.19bn from Rs69.12bn, resulting in a gross profit of Rs4.83bn, down 27% from Rs6.59bn in the prior year.

The gross profit margin declined sharply to 6.2% from 8.7% in FY2024, indicating severe margin compression due to rising input costs outpacing revenue growth.

The net profit margin stood at negative 5% compared to negative 0.2% in the same period last year, reflecting the company's significantly deteriorated profitability.

Distribution and marketing expenses increased 5% to Rs733.3m from Rs701.4m, while administrative expenses declined 18% to Rs1.68bn from Rs2.06bn, demonstrating some cost control measures.

Other expenses surged 2.8 times to Rs661.9m from Rs236.7m, while other income decreased 26% to Rs591.6m from Rs795m.

Operating profit declined 47% to Rs2.34bn from Rs4.39bn in FY2024, reflecting the substantial erosion in operational performance.

Finance costs decreased 24% to Rs5.73bn from Rs7.53bn, providing some relief as borrowing costs moderated.

However, the company still recorded a loss before minimum tax differential, final tax and income tax of Rs3.39bn compared to a loss of Rs3.15bn in the prior year, representing an 8% increase in losses.

Loss before income tax stood at Rs3.37bn, up 8% from Rs3.11bn in the corresponding period last year.

The company recorded an income tax credit of Rs531.1m compared to an income tax charge of Rs2.95bn in FY2024, which provided some relief but could not offset the operational challenges.

The dramatic widening of losses was primarily driven by severe margin compression as cost of sales grew faster than revenue, resulting in a 27% decline in gross profit.

The sharp increase in other expenses and reduced other income further pressured profitability, though these were partially mitigated by lower finance costs and the income tax credit.

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