Engro Polymer fails to live up to expectations as net earnings drop by 24%
MG News | April 24, 2019 at 11:13 AM GMT+05:00
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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