Islamabad, Engro Polymer Chemical Limited (EPCL) conducted a corporate briefing to discuss its financial performance for the first quarter of 2024, revealing a loss after tax of Rs 900 million. This downturn contrasts with the profit reported in both the previous quarter and the same period last year.

According to JS Global, the loss in 1QCY24 was primarily due to a significant drop in gross margins, which fell as a result of decreased core delta margins and heightened gas prices. The core delta, which reflects the price difference between ethylene and PVC, diminished to US$279 per ton in March 2024 from US$350 per ton in December 2023. Concurrently, the increase in global ethylene prices, spurred by market instability and supply issues, exacerbated the financial strain.

EPCL also experienced a reduction in PVC sales volumes, which dropped from 52KT in the fourth quarter of 2023 to 45KT in the first quarter of 2024. The slump in domestic PVC demand was attributed to a variety of factors, including political uncertainty, an unfriendly business environment, high inflation, and escalating energy costs.

Despite these challenges, EPCL management remains optimistic about a recovery in PVC demand after May 2024, driven by expected improvements in construction activities. Additionally, the company is focusing on maintaining its market share in the caustic soda segment to counterbalance the declining PVC volumes.

EPCL is also progressing with its HTDC and H2O2 projects, anticipated to complete within the year, which were initially expected by the end of 2023. These developments are part of broader strategic efforts to stabilize and expand the company’s operational capabilities amid fluctuating market conditions.