EPCL endures 27% decline in earnings owing to higher finance costs

MG News | October 15, 2019 at 01:51 PM GMT+05:00

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October 15, 2019 (MLN): The Board of Directors of Engro Polymers and Chemical Limited held its meeting today, to discuss and present the financial results for the nine months ended on September 30, 2019.

As per the document issued to Pakistan Stock Exchange, the company has posted net earnings of Rs. 2.8 billion for the said period, which signifies a decline of 27% over the same period of last year.

Various analysts have proposed that the cause behind this deterioration in profits pertains to adoption of IFRS16 by the company in the second quarter of FY19.

While the increase in the prices of PVC helped lift topline income by 9%, the hike in gas tariffs pushed cost of sales up by 11%.

The non-core income of the company surged by 14% owing to returns from various short term investments as well as foreign exchange. On the other hand, finance costs swelled by 165% due to higher interest rates.

The company also announced an Interim Cash Dividend for the said period at Rs. 0.6 per share i.e. 6%.

Consolidated Profit and Loss Account for the nine months ended September, 30 2019 ('000 Rupees)
	Sep-19	Sep-18	% Change
Net revenue	27,834,222	25,523,707	9.05%
Cost of sales	(21,586,567)	(19,427,062)	11.12%
Gross profit	6,247,655	6,096,645	2.48%
Distribution and marketing expenses	(244,718)	(292,084)	-16.22%
Administrative expenses	(603,041)	(535,516)	12.61%
Other operating expenses	(1,106,104)	(470,237)	135.22%
Other income	710,679	620,266	14.58%
Operating profit	5,004,471	5,419,074	-7.65%
Finance cost	(1,199,902)	(451,501)	165.76%
Profit before taxation	3,804,569	4,967,573	-23.41%
Taxation	(990,086)	(1,102,137)	-10.17%
Profit for the period	2,814,483	3,865,436	-27.19%
Earnings per share - basic and diluted (Rupees)	3.10	5.03	-38.37%

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