Engro Polymer & Chemicals Limited (EPCL) delivered a significant improvement in its financial performance during the first half of 2026, returning to profitability on the back of stronger PVC prices, higher sales volumes and lower energy costs.
According to the company’s half-year report for the period ended June 30, 2026, EPCL recorded revenue of approximately Rs39 billion, representing a 4% increase from the same period last year. Profit after tax reached around Rs1.6 billion, compared with a loss of Rs3.55 billion reported in the corresponding period of 2025. The company reported earnings per share of Rs1.79, compared with a loss per share of Rs3.55 a year earlier.
PVC market provides support
The company said the global PVC market remained firm through much of the second quarter, with prices rising during April and May amid pressure on freight, energy and feedstock availability linked to geopolitical tensions.
However, market conditions changed toward the end of the quarter as some disruptions eased and naphtha-based crackers restored operating rates. This resulted in a correction in PVC prices during June.
EPCL noted that ethylene prices also remained elevated for most of the quarter because of continued naphtha shortages before easing toward the end of June. The ethylene dichloride (EDC) market remained relatively tight, keeping feedstock costs elevated for VCM and PVC producers.
Domestic sales face import pressure
While international market conditions supported the business, domestic PVC sales declined during the second quarter as lower-priced imports entered the Pakistani market.
The company said the downward movement in PVC prices from May through June also encouraged some buyers to delay purchases in anticipation of further declines. Domestic volumes recovered in June as customers returned to the market.
The company nevertheless expects domestic demand to remain broadly stable, although imports are likely to remain an important challenge.
Lower energy costs offer additional relief
One of the notable developments during the period was a sharp reduction in the applicable captive gas levy. According to the company’s review, the levy declined from Rs1,406 per MMBtu in January to Rs365 per MMBtu in May following a revision in the underlying levy formula.
The reduction provided some relief on costs, particularly for the company’s chlor-alkali operations, after energy expenses had increased in the preceding quarter.
Hydrogen peroxide market also improves
EPCL’s hydrogen peroxide business experienced a gradual recovery during the quarter. Import prices rose above $400 per ton before easing toward the end of the period, but remained above pre-war levels.
The company also highlighted the extension of anti-dumping duties on hydrogen peroxide imports from Belgium, China, Indonesia, South Korea, Taiwan, Thailand and Turkey for another five years. This provided support for the domestic pricing environment.
Profitability makes a strong comeback
The improvement in market conditions and cost pressures translated into a substantial turnaround in EPCL’s bottom line. The company’s consolidated financial statements show profit after tax of approximately Rs1.63 billion for the six months ended June 30, 2026, compared with a Rs3.23 billion loss in the same period of 2025.
The turnaround is particularly notable because the company was dealing with challenging market conditions a year earlier. The latest results indicate that stronger selling prices, improved sales volumes and lower energy costs helped restore profitability.
Outlook remains cautiously optimistic
Looking ahead, EPCL expects PVC and feedstock prices to gradually correct during the second half of the year as geopolitical disruptions ease and East Asian crackers restore operating rates.
The company expects ethylene and EDC markets to improve further into the third quarter, although the pace will depend on the durability of geopolitical de-escalation as well as energy and freight costs.
On the domestic front, EPCL plans to strengthen its market position through product quality, market development and safe and reliable operations. The company also pointed to the provisional Anti-Dumping Duty on PVC imports from the United States and Indonesia, saying the measure has already started affecting import offers in Pakistan.
Overall, Engro Polymer & Chemicals enters the second half of 2026 in a considerably stronger position than a year earlier. The return to profitability, combined with improved market conditions and lower energy costs, marks a notable recovery for the company, although global feedstock prices and competition from imports remain key factors to watch.
