EPCL - CY23 Result Review - Quarterly earnings surge , however payout lags behind , (AKD Off the Analyst's Desk Feb 20, 2024)
EPCL - CY23 Result Review - Quarterly earnings surge , however payout lags behind
Engro Polymer & Chemicals Ltd. (EPCL) announced its 4QCY23 result where the company posted earnings of PkR3.5bn (diluted EPS: PkR2.93) compared to PAT of PkR2.6bn (diluted EPS: PkR2.19) in the preceding quarter, up 34%QoQ. The said quarterly surge is primarily driven by reductions in finance costs and improvements in gross margins. The result exceeds market expectations, however, payout for the quarter remained lower than anticipated.
- Topline witnessed a decline of 23%QoQ to clocked in at PkR19.2bn compared to PkR25.0bn in the quarter before, primarily attributed to reduced sales volumes amid a seasonal slowdown in construction activities during the winter season.
- Gross margins improved to 26.9% vs. 26.1% in previous quarter, with increased primary core margins offsetting the impact of a gas price hike.
- Other income rose by 6.1%QoQ to PkR399mn, likely due to exchange gains amid PkR appreciation, ending the year at PkR281.86/US$ compared to PkR287.74/US$ at the end of Sept’23.
- Notably, finance costs plummeted by 80%QoQ to PkR250mn compared to PkR1.2bn in the previous quarter, potentially due to adjustments on foreign loans, although further clarity is awaited.
- For the full year CY23, earnings accumulated to PkR7.39/sh vs. PkR9.67/sh in SPLY, a decline of 24%YoY, primarily due to the contraction of PVC-Ethylene primary margins.
- Alongside the result, company announced a final dividend of PkR1.0/sh, taking full-year dividend to PkR6.0/sh. However, company's payout for the full year declined to 61% compared to previous two year average of 98%.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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