Engro Polymer & Chemicals Limited (PSX: EPCL) reported a consolidated profit of Rs. 2.6 billion, up 17 percent year-on-year (YoY) in 3QCY23.
This came higher than industry expectations due to higher-than-expected sales, according to Topline Securities.
This takes 9MCY23 consolidated earnings to Rs. 5.4 billion, down 42 percent YoY. Along with the result, EPCL also announced an interim cash dividend of Rs. 2.5 per share in 3QCY23, taking the total payout for 9MCY23 to Rs. 5.0 per share.
EPCL reported highest-ever quarterly sales of Rs. 25 billion, up by 48 percent YoY in 3QCY23 mainly due to higher volumetric sales, and 23 percent YoY devaluation of PKR against US$.
Gross margins during 3QCY23 clocked in at 26.1 percent versus 29.4 percent in 3QCY22. Core delta during 3QCY23 clocked in at US$445 per ton versus US$ 510 per ton in the same period last year, down 13 percent YoY.
Deputy Head of Research at JS Global Waqas Ghani told ProPakistani, “Going forward, the pending increase in industrial gas tariff would be negative for the company’s margins. Moreover, bearing a strong correlation with crude oil prices, a rising trend in Ethylene prices cannot be ruled out following higher oil prices post-disturbance in the Middle East, adding further pressure on the company’s core margins”.
Distribution and marketing expenses were up by 7 percent YoY amid an increase in volumetric sales and transportation costs.
EPCL’s financial charges went up by 42 percent YoY mainly due to an increase in borrowings and higher interest rates.
The effective tax rate clocked in at 40 percent in 3QCY23 compared to 28 percent and 54 percent in 3QCY22 and 2QCY23.
The company posted earnings per share (EPS) of Rs. 2.91 per share for 3QCY23 and an EPS of Rs. 5.93 for 9MCY23.
At the time of filing, the company’s scrip at the bourse was Rs. 43.54, up 3.22 percent or Rs. 1.36 with a turnover of 3,486,348 shares on Wednesday.
