Engro Polymer & Chemicals Limited (EPCL) has made a notable turnaround in its financial performance during the first half of 2026, moving back into profit after recording a substantial loss in the corresponding period last year.

According to the company’s financial results for the half year ended June 30, 2026, consolidated profit after tax reached Rs1.63 billion, compared with a loss of Rs3.23 billion in the same period of 2025. The company reported the results to the Pakistan Stock Exchange on August 17, 2026.

Revenue shows moderate growth

EPCL’s consolidated revenue from contracts with customers increased to Rs39.26 billion during the six-month period, compared with Rs37.61 billion a year earlier.

At the same time, the company’s cost of sales declined slightly to Rs34.68 billion from Rs36.41 billion. This helped consolidated gross profit rise sharply to Rs4.58 billion, compared with just Rs1.20 billion in the first half of 2025.

The improvement in gross profitability was a key factor behind the company’s return to positive earnings.

Operating performance strengthens

EPCL’s consolidated operating profit stood at Rs5.26 billion in the first half of 2026, reversing an operating loss of Rs225.38 million recorded in the same period last year.

The company also reported Rs2.17 billion in other income, substantially higher than the Rs213.60 million recorded a year earlier. Although finance costs remained elevated at around Rs3.69 billion, the stronger operating performance allowed the company to post profit before income tax of Rs1.33 billion, compared with a loss of Rs3.18 billion previously.

Earnings per share turn positive

The turnaround was also reflected in EPCL’s earnings per share. Consolidated basic EPS improved to Rs1.79 for the half year, compared with a loss per share of Rs3.55 in the corresponding period of 2025.

Diluted EPS stood at Rs1.35, against a loss of Rs3.55 per share a year earlier.

Standalone results also improve

The company’s standalone financial performance showed a similar recovery.

Standalone revenue increased to Rs38.48 billion from Rs37.40 billion, while gross profit rose to Rs4.55 billion from Rs1.42 billion.

Standalone operating profit reached Rs5.30 billion, compared with Rs238 million in the first half of 2025. Profit after tax stood at Rs1.71 billion, reversing a loss of Rs2.82 billion recorded a year earlier.

Standalone basic EPS improved to Rs1.89 from a loss of Rs3.11 per share.

Cash position remains an area to watch

Despite the improvement in profitability, cash flow remained challenging during the period.

On a consolidated basis, EPCL reported net cash used in operating activities of Rs5.59 billion, compared with net cash generated of Rs4.84 billion in the same period last year.

The company generated Rs3.27 billion from investing activities, while financing activities used Rs3.22 billion. As a result, cash and cash equivalents stood at approximately Rs1.07 billion at June 30, 2026, compared with a negative Rs1.88 billion figure reported for the corresponding period of 2025.

No dividend announced

Despite the return to profitability, EPCL’s board recommended no cash dividend, bonus shares or right shares for the period ended June 30, 2026.

Overall, Engro Polymer’s first-half results mark a significant improvement from the previous year. The combination of higher revenue, lower cost of sales, stronger gross profit and substantially improved operating performance helped the company move from a large consolidated loss to a healthy profit.

The next challenge for EPCL will be to sustain this operational recovery while managing finance costs and improving cash generation. For investors, the sharp improvement in earnings provides a more positive picture of the company’s performance in the first half of 2026.