EPCL Q2 profit plunges 93pc

KARACHI: Engro Polymer & Chemicals Limited (EPCL) on Friday said its profit for quarter ended on June 30, 2020 fell 93 percent to Rs29 million, due to lockdown-led closure and subsequent drop in sales.

It brings the earning per share (EPS) to Rs0.03 for the period under review, while the EPCL had earned Rs451 million (EPS: Rs0.50) in the corresponding period a year earlier, the company said.

The earnings came in lower-than-our expectations due to lower-than-expected sales and gross margins.

Brokerage Topline Securities in their research note said, “Net sales of the company declined 37 percent YoY during the quarter, primarily due to lower volumetric sales amidst closure of plant from March 24, 2020 to April 20, 2020 amid countrywide lockdown due to the outbreak of COVID-19”.

Moreover, the company’s gross margin declined by 12.1ppts YoY to 9.8 percent in 2Q2020 from 21.9 percent in 2Q2019, which was significantly lower than our estimate, report said.

The company booked tax reversal of Rs9 million in 2Q2020 against a tax expense of Rs102 million in same period last year.