Q2 2026 Engro Polymer & Chemicals Ltd Earnings Call Transcript

Aug 18, 2026 / 11:00 AM GMT

Release Date Price: ₨12.93

Transcript

Key Points

Positve

Engro Polymer & Chemicals Ltd (KAR:EPCL) reported a significant turnaround in profitability, with EPS improving to PKR1.79 from a loss of PKR3.55 in the same period last year.
Gross profit surged by 282% year-over-year, driven by plant efficiencies, higher global PVC prices, and successful cost-saving initiatives like the HDDC project and zero-gap membranes.
The company achieved a major safety milestone of 15 million safe man-hours, highlighting its strong operational safety culture.
The captive gas levy was significantly reduced from PKR1,406 per MMBtu to around PKR365 per MMBtu, easing margin pressure and providing a positive impact of PKR3-4 billion on the P&L.
The hydrogen peroxide business is gaining traction, with sales volumes increasing to 10-11 KT from 3 KT last year, and the company is building a strong reputation in the market.
Provisional anti-dumping duties imposed on PVC imports from the US and Indonesia are expected to protect the local market from unfair trade practices and support domestic sales.

Negative

Global PVC prices have declined sharply from post-war peaks, and the core delta (margin) contracted to $273 per ton in Q2 due to higher ethylene prices, which will continue to pressure margins.
The company faces significant raw material supply chain disruptions and higher feedstock costs due to geopolitical conflicts in the Gulf, impacting ethylene and EDC availability and pricing.
Hydrogen peroxide imports from Bangladesh, which benefit from subsidized energy costs, continue to challenge domestic pricing and market share.
Finance costs increased by 23% due to new long-term debt taken on to finance the power project, adding to the company's expense burden.
The company experienced a negative operating cash flow of PKR5.5 billion in the first half, primarily due to a 41% inventory build-up from slower offtake in Q2.
The outlook for the second half remains challenging due to potential further declines in PVC prices, ongoing feedstock unavailability, and continued import pressure in the hydrogen peroxide segment.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

EPCL.PSX - Engro Polymer & Chemicals Ltd
Q2 2026 Engro Polymer & Chemicals Ltd Earnings Call
Aug 18, 2026 / 11:00AM GMT

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Presentation
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Unidentified Company Representative [1]
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Is everybody in Aruba? Assalamualaikum everyone, Ms. Majay Rahmani Rahim. Welcome to Engro Polymer's first half annual first half corporate briefing for analysts regarding the first half results. I think everybody has joined. We can move ahead to the next slide.

Quick look at the agenda and now onwards to the macroeconomic overview. Over the first half of 2026, if you look at the macroeconomic indicators of the country, you'll see everyone probably knows already that real GDP for Pakistan grew by around 3.7% in FY26. Last year, this number was around 3.2%. Inflation rose to 11.1% year on year in June 26.

There was a hike in energy prices, which I'm sure everybody has

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