Karachi: Engro Polymer and Chemicals Ltd (EPCL) held an analyst briefing to discuss its financial performance for the calendar year 2024 and future outlook. The company reported a significant loss of PKR 160.6 million compared to a profit of PKR 8.9 billion in the same period last year. The loss was attributed to lower international prices, rising energy costs, and higher finance costs due to increased borrowing.

According to a statement by AKD Securities Limited, the company experienced a decline in PVC sales volume to 212,000 tons from 221,000 tons in the previous year. Despite the decline, EPCL managed to increase its PVC sales in the fourth quarter through aggressive pricing strategies and targeted incentive programs. The company maintained its chlor-alkali market share and continued its presence in the export market, despite challenging international pricing conditions.

PVC prices dropped in the second half of the year due to oversupply and weak demand, affecting the company's core margins. Ethylene prices also saw a decline, contributing to the pressure on margins, which stood at US$337 per ton at year-end. The management anticipates stable core margins in 2025, with expectations of recovering demand supported by construction activity and public sector development spending.

The company is evaluating alternative power options due to challenges in securing gas at competitive rates. On the expansion front, the High-Temperature Direct Chlorination and Hydrogen Peroxide projects are slated for commissioning in the first quarter of 2025. Future dividend payouts will depend on profitability and investment needs. AKD Securities Limited maintains a 'SELL' stance on EPCL, citing ongoing pressures from high energy prices and depressed core margins.