Karachi: Engro Polymer Chemical Limited (EPCL) disclosed significant losses during its corporate briefing yesterday, where the company discussed its financial results for the second quarter of 2024 and its strategic outlook. EPCL reported a consolidated loss after tax of Rs688 million for 2QCY24, in stark contrast to the profit of Rs1.6 billion recorded in the same period last year.

According to JS Global, EPCL’s performance downturn was primarily due to decreased margins in the Poly Vinyl Chloride (PVC) segment, exacerbated by rising gas prices and reduced local demand. This fiscal year’s first half saw the company posting a loss of Rs1.6 billion, significantly down from a profit in the first half of the previous year, marked by an earnings per share of Rs3.02. The management attributed the poor performance to lower gross margins resulting from increased energy costs and a sluggish local market.

In response to the declining PVC market, EPCL is shifting its focus towards the Caustic soda segment, where it aims to maintain market share despite stable international prices and a struggling domestic textile sector. The company reported an 8% increase in Caustic soda sales volume year-over-year during the first half of 2024, totaling 39,000 tons.

The rising cost of gas, which reached Rs 3,000/MMBtu in July 2024, continues to be a challenge for the company. EPCL management is exploring alternative energy sources to mitigate this issue and remains hopeful about the potential recovery in the Large-Scale Manufacturing Sector and the government’s focus on boosting textile exports.

Furthermore, EPCL cited exogenous factors such as the Russia-Ukraine conflict and COVID-19 disruptions in China as reasons for delays in their Hydrogen Peroxide and High Temperature Direct Chlorination segments, with a plan to commence operations within the calendar year.