Engro Polymer Posts Rs. 161 Million Loss for 2024 Despite Profit in Q4

Engro Polymer & Chemicals Ltd (PSX: EPCL) released its 2024 financial results today, reporting a loss of Rs. 161 million (LPS: Rs. 0.40), a contrast to the profit of Rs. 8,932 million (EPS: Rs. 9.12) recorded in the same period last year. Meanwhile, the company posted a profit of Rs. 2,128 million (EPS: Rs. 2.34) in 4QCY24, down 61 percent YoY. Net sales for CY24 were recorded at Rs. 75.7 billion, marking a decline of 7 percent YoY. On a quarterly basis, the topline depicted an 11 percent YoY jump, reaching Rs. 21.3 billion in 4QCY24. According to Arif Habib Limited, this was driven by higher volumetric sales. The gross profit margin for CY24 stood at 8.7 percent, a significant drop from 25.3 percent in CY23, primarily due to higher gas prices and weaker PVC margins. In 4QCY24, gross margins fell to 14.1 percent, down by 10pps YoY for similar reasons. Finance costs surged by 79 percent YoY to Rs. 7.5 billion for CY24, driven by a rise in short-term borrowings. During 4QCY24, the finance cost increased by 7x YoY, reflecting the higher short-term borrowing levels. Other income dropped by 49 percent YoY, reaching Rs. 795 million in CY24, primarily due to lower short-term investments and falling interest rates. In 4QCY24, other income also declined by 23 percent YoY due to these factors. The company reported a tax reversal of Rs. 1.2 billion in 4QCY24, compared to a tax expense of Rs. 931 million in 4QCY23. In CY24, the company did not declare any cash dividend due to overall losses, whereas it paid a cash dividend of Rs. 6.00/share in CY23. Net margins for CY24 were recorded at -0.2 percent, a decline from 11.0 percent in CY23.