Engro Polymer & Chemicals Limited (EPCL) announced its financial results for the first nine months of the calendar year 2024, revealing a loss of Rs. 2.288 billion (loss per share: PKR 2.52). This marks a significant downturn from the Rs. 5.386 billion profit (earnings per share: PKR 5.93) reported in the same period last year. The company also posted a loss of Rs. 698 million (loss per share: PKR 0.77) for the third quarter of 2024.

Net sales for 9MCY24 were recorded at Rs. 54.5 billion, reflecting a 12% year-on-year decline. The third quarter saw a 20% year-on-year drop in sales, totaling Rs. 20.1 billion. This decline is primarily attributed to a 3% year-on-year decrease in PVC prices in USD terms, as noted by Arif Habib Limited.

The gross profit margin for 9MCY24 fell to 6.6%, down from 25.6% in the same period last year, due to higher gas prices and reduced PVC margins. During the third quarter, gross margins further declined to 5.5%, a decrease of 20 percentage points year-on-year.

Finance costs surged by 59% year-on-year, reaching Rs. 1,964 million in the third quarter of 2024, driven by increased short-term borrowings. However, on a sequential basis, finance costs decreased by 8% year-on-year, attributed to a decline in interest rates.

Other income dropped by 48% year-on-year to Rs. 194 million in the third quarter, due to lower short-term investments. The company recorded a tax reversal of Rs. 749 million in the third quarter, compared to a tax expense of Rs. 1,769 million in the same quarter last year.

Looking ahead, EPCL anticipates continued pressure on PVC margins due to the global economic slowdown and sluggish construction activity.