reports
- Team AKD Research
EPCL_Analyst Briefing Takeaway, (AKD Off the Analyst's Desk Aug 11, 20...
EPCL: Analyst Briefing Takeaway Engro Polymer & Chemical Limited (EPCL) conducted its analyst briefing today to brief investors on its 2QCY23 results and future outlook. Here are the key highlights from the briefing: To recall, EPCL recorded earnings of PkR1.5bn (EPS: PkR1.39) in 2QCY23, marking a 33%YoY decline compared to PkR2.3bn (EPS: PkR2.45) in SPLY. The drop in earnings was primarily attributed to an annual decrease in core delta margins and huge taxation charges. PVC sales vol...
- Team AKD Research
EPCL - 2QCY23 Result Review - Super tax erodes the earnings growth, (A...
EPCL - 2QCY23 Result Review - Super tax erodes the earnings growth Engro Polymer & Chemicals Limited (EPCL) announced its 2QCY23 results, where the company posted earnings of PkR1.6bn (Basic EPS: PkR1.4), marking a 32%QoQ increase compared to PkR1.2bn (EPS: PkR1.3) in the previous quarter. This growth is primarily attributed to availability of local gas and uptake growth during the quarter. The company also announced an interim dividend of PkR1.5/sh, bringing the 1HCY23 payout to PkR2.5/sh. ...
- IMS Research Team
Engro Polymer & Chemicals Ltd: 2QCY23 Review - Elevated finance cost a...
EPCL has posted consolidated NPAT of PKR1.5bn for 2QCY23 (EPS: 1.39), down 33% YoY but up 32% QoQ. The result came slightly lower than our 2QCY23 expected EPS of 1.52, where the major deviation stemmed from higher than expected finance cost and one-off high effective tax due to super tax. This takes 1HCY23 total consolidated NPAT to PKR2.7bn (EPS: 2.69), down 61% YoY. The company has announced an interim cash dividend of PKR1.50/sh taking 1HCY23 total payout to PKR2.50/sh. We expected a payou...
- IMS Research Team
Jun'23 Result Previews: Low demand and one-off super tax to clip earni...
* We expect the IMS Chemicals Universe (LOTCHEM, EPCL and LCI) to post 2Q2023 combined NPAT of c.PKR4.5bn, down 21% QoQ and 31% YoY. * Muted demand from the textile sector and resultantly lower sales volume, together with the one-off impact of super tax, will lead to a decline in earnings for LOTCHEM and LCI. We expect a payout of PKR1.0/sh & PKR15.0/sh from LOTCHEM and LCI, respectively. * We expect a sharp lift in gross margins for EPCL on resumption of natural gas supply post-wi...
- IMS Research Team
Engro Polymer & Chemicals Ltd: 1QCY23 Review - Depressed demand and ma...
EPCL has posted NPAT of PKR1.2bn for 1QCY23 (EPS: PKR1.31), down 75% YoY/45% QoQ. The result came largely in-line with our expected NPAT of PKR1.2bn (EPS: PKR1.41). The company has announced an interim cash payout of PKR1.0/sh. Also in line as we expected. KEY TAKEAWAYS FROM 1QCY23 RESULT: * Net Sales clocked in at PKR17.9bn, down 22% YoY and 11% QoQ. This is lower than our expected topline of PKR20.9bn. We believe, the major deviation came from the lower-than-expected sales volume of PVC du...
- IMS Research Team
Pakistan Chemicals: March'23 Result Previews
ONE-OFF LCI GAIN TO OVERSHADOW CORE DISCREPANCIES We expect the IMS Chemicals Universe (LOTCHEM, EPCL and LCI) to post combined core NPAT of c.PKR3.6bn in the quarter ended March 31st, down 40%QoQ /64%YoY. However one-off capital gain of PKR8.3bn on the sale of NutriCo Morinaga stake will elevate LCI profits to PKR9.1bn and therefore, will take reported sector profits to PKR11.9bn up 21% YoY and 2.2x QoQ. On a more granular level, sales volumes are likely to decline amid reduced textile expor...
- Ali Aziz Soorty
Engro Polymer & Chemicals Ltd: 3QCY22 Review: Depressed core delta led...
EPCL has posted consolidated NPAT of PKR2.3bn for 3QCY22 (EPS: PKR2.48); down 27% YoY and 3% QoQ. The result came in-line with our expected EPS of PKR2.40. The company also announced an interim cash dividend of PKR2.50/sh vs. our estimated DPS of PKR2.25. * Net Sales down 24% QoQ and 10% YoY to PKR16.9bn (broadly in-line with our estimated topline of PKR17.4bn), owing to lower sales volume amid muted construction activity during the quarter. * Gross margin came in at 29.4%, down by 4.4p...
- Ali Aziz Soorty
Engro Polymer & Chemicals Ltd: 2QCY22 Result Review - Earnings beat dr...
EPCL has posted NPAT of PKR2.3bn for 2QCY22 (EPS: PKR2.57); down 25% YoY and 50% QoQ. The result came in higher than our expected EPS of PKR1.25, with deviation stemming from higher-than-expected gross margins and lower effective tax rate. The company also announced an interim cash dividend of PKR2.5/sh vs. our estimated DPS of PKR1.25. * Net Sales clocked in at PKR22.3bn (lower than our estimated topline of PKR23.6bn), down 4% QoQ but up 50% YoY, owing to higher demand and international PVC...
- Team AKD Research
- IMS Research Team
Engro Polymer & Chemicals Ltd: 1QCY22 review – higher-than-expected vo...
EPCL has posted NPAT of PKR4.7bn for 1QCY22 (EPS: PKR5.19), up 14% yoy and 1% qoq, against our expected EPS of PKR4.17. The major deviation came from higher-than-expected PVC volumes and better spreads. The company also announced an interim cash dividend of PKR5/sh vs. our estimated DPS of PKR4. Along with the result, the company has announced the approval of Capex US$4.0mn de-bottlenecking project (VCM production to 300KT per annum). We await the company’s analyst briefing to shed more light...
- Ali Aziz Soorty
Pakistan Chemicals: Earnings to sequentially lower amid normalized spr...
* We expect IMS Chemicals universe (LOTCHEM and EPCL) to post combined net profits of PKR5.1bn for 1QCY22, mainly led by healthy international spreads. Spreads of both PTA and PVC benefited from global macroeconomic uncertainty (Russia - Ukraine conflict and China power crisis). * LOTCHEM is expected to post 1QCY22 EPS of PKR0.87, where PTA-PX spreads averaged US$115/ton during the quarter. Spreads were slightly lower from their recent peak due to consistently rising PTA prices; while n...
- Azan Memon
Engro Polymer & Chemicals Ltd: High oil prices can trigger a down-cycl...
> PVC-Ethylene spreads have corrected 40% from its recent peak level since Nov’21. Amid the Russia-Ukraine crisis and the prospect of oil prices remaining above US$100/bbl for long, we flag the risk of further compression in spreads. Historically, PVC demand and spreads compressed sharply when oil prices were above US$100/bbl. * EPCL’s stock price suggests implied PVC-Ethylene spreads of c.US$450/ton for CY23f onwards, already pricing in a decline of 40% from present levels, in our view. Th...
- Azan Memon
Engro Polymer & Chemicals Ltd: 4QCY21 review – Lower-than-expected tax...
EPCL has posted a NPAT of PKR4.7bn for 4QCY21 (EPS: PKR5.16), up 29% yoy and 51% qoq, against our expectation of PKR4.3bn (EPS: PKR4.71). The big jump in earnings is due to higher PVC-Ethylene spreads. Profits before tax are lower than our expectation due to higher Other expenses; however, a lower effective tax rate has led to earnings beat at NPAT level. The result takes CY21 net profits to PKR15.1bn, tripling yoy. The company also announced a final cash dividend of PKR5.5/sh taking the full...
- Azan Memon
Pakistan Chemicals: Strong spreads will underpin earnings growth
We expect our Chemicals universe (LOTCHEM and EPCL) to post combined profitability of PKR5.4bn for 4QCY21 led by healthy international spreads. Spreads of both PTA and PVC benefited from global demand-supply mismatch. LOTCHEM is expected to post 4QCY21 EPS of PKR0.77 (CY21 EPS: PKR2.90) where PTA-PX spreads averaged US$155/ton during the quarter. Spreads were bolstered by new PX capacities in the region, which depressed its prices. We prefer LOTCHEM between the two, because there is no risk o...
- Azan Memon
Engro Polymer & Chemicals Ltd: Spreads to remain healthy but normalise...
We resume coverage on EPCL with a Neutral rating and a TP of PKR66/sh for December 2022. Our EPS estimates for CY22/23f are PKR11.66/10.75, based on PVC-Ethylene spreads of US$650/600 per ton. For the long term, we have assumed spreads at US$450/ton, 7% higher than the prior 13yr average spreads. Our Neutral stance on EPCL stems from the expectation of a sharp decline in PVC-Ethylene spreads towards its long-term average of US$400-450/ton (still healthy levels). The expected correction in spr...
- Team AKD Research
EPCL_announced 3QCY21 EPS of PkR 3.43 - In line with expectation, (AKD...
AKD, Off the Analyst's Desk EPCL: announced 3QCY21 EPS of PkR 3.43 - In line with expectation Engro Polymer & Chemicals Ltd (EPCL) announced 3QCY21 NPAT of PkR3.12bn (EPS: PkR3.43), up 65.9%YoY and flat QoQ, taking 9MCY21 NPAT to PkR10.4bn (EPS: PkR11.45) vs. PkR2.05bn (EPS: PkR2.25) in 9MCY20. The result was in line with our expectation, the company however, surprised with an interim cash dividend of PkR3.0/sh, taking 9MCY21 payout to PkR11.80/sh, translating into +100% payout vs. 5yr his...
- Team AKD Research
Pakistan Energy_Storm in oil, petrochem & coal markets, (AKD Daily, Se...
AKD Dail Pakistan Energy: Storm in oil, petrochem & coal markets The Hurricane Ida, which hit the US gulf coasts on 28th Aug’21 has led to soaring energy and petrochemical prices where oil, coal and PVC prices witnessed an upswing of 5.2/9.0/8.9%WoW. While, oil price rally has witnessed a cool-off, coal has made new highs, touching US$150/MT. Even though local cement prices have increased PkR60-70/bag in last 2 months, further price increase cannot be ruled out with utilization standing at ...
- Rahul Hans
Engro Polymer & Chemicals Ltd: 2QCY21 analyst briefing takeaways
Engro Polymer & Chemicals (EPCL) posted a NPAT of PKR3.1bn (EPS: PKR3.46) for 2QCY21, a sharp jump from a NPAT of PKR12mn (EPS: PKR0.01) in SPLY, but down 24% qoq. KEY HIGHLIGHTS OF 2QCY21 RESULTS: * EPCL’s market share in PVC in 1HCY21 grew to the highest level of 95% vs 64% in 1HCY20. The company sold 44,000 tons of PVC in 2Q; an increase of 33% yoy but lower by 17% qoq. EPCL also exported 8,000 tons of PVC in 1HCY21. * Overall the sales volumes declined in 2QCY21 mainly due to extend...
- Rahul Hans
Engro Polymer & Chemicals Ltd: 2QCY21 review – Massive earnings growth...
Engro Polymer & Chemicals (EPCL) has posted a NPAT of PKR3.1bn (EPS: PKR3.46) for 2QCY21, a sharp jump from a NPAT of PKR12mn (EPS: PKR0.01) in SPLY, but down 24% qoq. The massive yoy jump emanates from (i) unprecedented Core delta of c.US$1025/ton in 2QCY21 compared with c.US$452/ton SPLY, (iii) surge in local demand for PVC on the back of rising construction activity and elevated textile demand. The company also announced a whopping interim cash dividend of PKR7.0/sh, in addition to PKR0.8/...
EPCL_Margins upcycle continue amid expansion, (AKD Daily, Jun 24, 2021...
AKD Daily EPCL: Margins upcycle continue amid expansion We revisit our investment case on Engro Polymer Chemicals Ltd (EPCL), incorporating higher than expected PVC ethylene margins in 2QCY21. Our annual margin assumptions now stand at US$740/MT for CY21 vs. US$670/MT assumed earlier. For 2QCY21 PVC ethylene margins clocked in at ~US$1,000/MT, up 19% QoQ on the back of persistent PVC supply disruption and soft ethylene prices. The confluence of multi-year high margins and PVC Line III commi...
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