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EPQL: Lower margins hurt profitability

October 20, 2021 (MLN): Engro Powergen Qadirpur Limited (EPQL) witnessed a net profit worth Rs1.46 billion (EPS: Rs4.52), depicting a decline of 28% YoY in the latest financial results for 9MCY21 ended on Sept 30, 2021, due to lower gross margins on the back of lower capacity payments.

The company, which follows the calendar year, had recorded a net profit of Rs2.03bn (EPS: Rs6.27) in the corresponding period a year ago, said in a financial statement sent to Exchange.

During 9MCY21, the revenue from operations went up by nearly 11.7% YoY to Rs7.77bn due to higher dispatch which was partly offset by lower capacity payments due to the debt servicing component no longer being applicable. Accordingly, gross profit fell by 29% YoY to Rs1.30bn, squeezing margins by 10ppt to 17% during the said period.

On the expense front, the company’s administrative expenses climbed by 40% YoY to Rs101mn during 9MCY21. On the contrary, the other expenses of the company inched lower by around 5.5%.

Meanwhile, the company witnessed a considerable decline in its other income by 96% to Rs3.2mn, which also affected the company’s profitability.

Some of the positive highlights include a 25% increase in net finance income, standing at Rs302mn coupled with a colossal decline in tax expenses by  91% YoY, providing some solace to the financial wellbeing of the company.

Profit and Loss Account for the Nine months ended September 30, 2021 (Rupees)

 

Sep-21

Sep-20

% Change

Sales

 7,774,532

 6,962,848

11.66%

Cost of Sales

 (6,471,856)

 (5,122,052)

26.35%

Gross Profit

 1,302,676

 1,840,796

-29.23%

Administrative Expenses

 (101,752)

 (72,625)

40.11%

Other Expenses

 (42,415)

 (44,858)

-5.45%

Other Income

 3,241

 79,623

-95.93%

Profit from Operations

 1,161,750

 1,802,936

-35.56%

Finance Income- net

 302,767

 242,751

24.72%

Workers' profits participation fund and Workers' welfare fund

 –  

 –  

 

Profit before Taxation

 1,464,517

 2,045,687

-28.41%

Taxation

 (1,356)

 (14,417)

-90.59%

Profit for the Period

 1,463,161

 2,031,270

-27.97%

Earnings per share – Basic and Diluted

4.52

6.27

-27.91%

 

Copyright Mettis Link News

Posted on: 2021-10-20T15:50:24+05:00

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