Engro Polymer Profit Slumps by 22% in 2022

Engro Polymer & Chemicals Limited has announced its financial results for the year ended December 31, 2022.

According to the company’s consolidated financial results, it posted a profit after tax of Rs. 11.689 billion during the calendar year 2022 (CY22) compared to a profit after tax of Rs. 15.061 billion reported in the previous calendar year, registering a decline of 22 percent.

The company reported earnings per share (EPS) of Rs. 12.86 in CY22 compared to EPS of 16.57 reported in the previous year.

During CY22 net sales witnessed an increase of 17 percent YoY to settle at Rs. 82.1 billion as compared to Rs. 70 billion, mainly attributable to 20 percent YoY depreciation of the Pakistani Rupee (PKR) according to a report by Arif Habib Ltd.

Gross margins of the company went down by 583 bps YoY to 28 percent during CY22 owed to lower PVC margins, which showed a dip of 35 percent YoY. However, the PKR depreciation during CY22 cushioned the decline.

Other expenses rose by 46 percent to Rs. 3.5 billion during CY22 compared to the previous year. Other income in CY22 stood at Rs. 1.481 billion, up 12 percent from Rs. 1.327 billion reported in the previous year. The finance cost of the company surged by 62 percent to Rs. 3.092 billion compared to Rs. 1.904 billion reported in the previous year. The full-year tax expense clocked in at Rs. 5 billion.

4QCY22 Performance

During the 4QCY22, the company posted a profit after tax (PAT) of Rs. 2.380 billion, down by 49 percent year-on-year (YoY) compared to Rs. 4.689 billion reported in the same quarter of the previous calendar year.

On a QoQ basis, earnings increased by 5 percent. The decline in earnings is due to decline in international PVC margins along with higher gas prices, we view. Along with the result, the company also announced a cash dividend of Rs. 2.50 per share, taking the CY22 payout to Rs. 12.50 per share.

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