Engro Polymer fails to live up to expectations as net earnings drop by 24%

By MG News | April 24, 2019 at 11:13 AM GMT+05:00

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April 24, 2019 (MLN): Engro Polymer and Chemical Limited (EPCL) has posted a Profit after Tax of Rs. 1.09 billion for the quarter ended March 31, 2019, which is almost 24.4% lower than the earnings of same period last year.

According to a research report by Arif Habib Limited, the company’s sales revenue showed a meager growth of 7.5% whereas cost of sales escalated by 15.2%. As a result, gross margins dropped by 11.5%, in spite of rise in international PVC margins.

However, the drop in earnings is primarily due to decline in other income by 48%, on account of insurance claims made during 1QCY18.

Moreover, the finance cost of the company increased by 70.2%, owing to SUKUK issuance of Rs. 8.7 billion.

The Earning per share of the company was stated at Rs. 1.2, i.e. almost 42% lesser than the same period last year.

Unfortunately, the company failed to hit its expected mark and performed below market anticipations.

Profit and loss account for the quarter ended March 31 2019 (Rupees'000)
	Mar-19	Mar-18	% Change
Net revenue	9,343,634	8,687,202	7.56%
Cost of sales	-7,130,936	-6,187,199	15.25%
Gross profit	2,212,698	2,500,003	-11.49%
Distribution and marketing expenses	-326,838	-367,619	-11.09%
Administrative expenses	-183,663	-162,837	12.79%
Other operating expenses	-124,665	-189,005	-34.04%
Other income	212,456	410,072	-48.19%
Operating profit	1,789,988	2,190,614	-18.29%
Finance costs	-268,364	-157,600	70.28%
Profit before taxation	1,521,624	2,033,014	-25.15%
Taxation	-427,466	-584,904	-26.92%
Profit for the period	1,094,158	1,448,110	-24.44%
Earnings per share - basic and diluted	1.20	2.07	-42.03%

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