Karachi: Pakistan PVC Limited has reported a challenging financial performance for the half year ending December 31, 2024, with a noted decline in profitability and ongoing operational issues. The company's financial statements, which were released alongside an auditors' review report, reflect a complex scenario marked by financial charges, idle costs, and depreciation.
The company's Gharo Plant remained closed throughout the period, contributing to a lack of production. This closure, coupled with reduced production of PVC pipes and fittings at its Islamabad facility due to financial constraints and adverse economic conditions, has impacted overall operations. Sales for the period increased marginally to 5.06 million rupees from 4.91 million rupees in the same period last year; however, net profit plummeted to 0.24 million rupees compared to 3.62 million rupees in the previous year.
According to information available from the Pakistan Stock Exchange (PSX), the company's auditors have raised concerns regarding Pakistan PVC Limited's status as a going concern. The auditors noted the continuous losses and lack of tangible outcomes from management's efforts to secure additional capital. The company's revival remains under consideration by the Committee for Revival of Sick Industrial Units, a body established by Pakistan's Finance Division.
The auditors also highlighted issues with direct confirmation from lenders regarding a short-term loan from the Government of Pakistan, amounting to 32.99 million rupees. This loan is reported under the current portion of long-term financing. Additionally, the company has faced challenges confirming long-standing balances in trade and other payables, particularly an accrued liability of 10.00 million rupees towards the Privatization Commission, Finance Division. Balance confirmation letters have been dispatched repeatedly, and the company reports receiving responses from most creditors.
Despite these difficulties, the company's other income, primarily driven by rental income, increased to 18.40 million rupees from 15.77 million rupees in the previous year, reflecting a positive aspect in an otherwise difficult financial landscape. The cost of sales increased to 18.02 million rupees, further impacting the company's gross loss, which stood at 12.96 million rupees compared to 12.99 million rupees last year.
The company's property, plant, and equipment values also saw a decrease due to depreciation, with operating assets closing at 126.58 million rupees and non-operating assets at 123.67 million rupees. The financial outlook remains uncertain, with management expressing hope for the resolution of longstanding disputes and a potential turnaround in fortunes.