Qudsia Bano

Cnergyico PK Limited has released its quarterly financial results for the period ending on September 30, 2023, revealing a challenging quarter marked by significant declines in key financial metrics. The company's revenue for the third quarter (Q3) of 2023 amounted to Rs40.36 billion, registering a substantial 29% year-on-year (YoY) decrease from Rs56.60 billion in the same period last year. This decline suggests a contraction in business activity, raising concerns about the impact of market conditions or potential operational challenges. In a surprising turn, Cnergyico PK reported a gross profit of Rs131.50 million for the quarter, marking a stark reversal from the gross loss of Rs4.86 billion in Q3 of 2022. While this indicates an improvement in the cost structure, the company continued to face challenges as reflected in the negative growth rate of -103%. Despite the improvement in gross profit, Cnergyico PK still faced an operating loss of Rs480.99 million, though this represents a substantial 91% reduction compared to the operating loss of Rs5.38 billion in Q3 of 2022.

The reduction in operating losses suggests efforts to streamline operations, but the company remains in a challenging position. The loss-before-taxation for the quarter stood at Rs2.93 billion, marking a 56% YoY decrease from the loss of Rs6.66 billion in the same period last year. The company reported a loss-after-tax of Rs2.78 billion, reflecting a 59% YoY decrease. The loss per share for Q3 was reported at Rs0.51, a significant 59% decrease from Rs1.23 in the corresponding quarter of the previous year. While the reduction in the loss per share is a positive sign, the company continues to grapple with the fundamental issue of sustaining profitability, reports WealthPK. Cnergyico Limited's Q3 2023 financial results highlight a challenging quarter with substantial declines in revenue and continued losses. The company's efforts to reduce operating losses and turn around the gross profit are noteworthy, but a comprehensive strategy addressing core issues is essential for sustainable recovery.

Cnergyico PK grappled with severe profitability challenges, as indicated by its deteriorating financial ratios. The gross profit margin, reflecting the efficiency of production and cost management, plunged to a concerning 5.03% in FY23, portraying potential inefficiencies or increased production costs. Likewise, the net profit margin followed suit, recording a negative 6.53%, signifying challenges in controlling overall expenses and achieving profitability. The drastic decline in earnings per share (EPS) growth to an alarming 362.92% in FY23 raises concerns, highlighting the significant hurdles the company faces in maintaining positive per-share earnings. The PEG ratio of 0.00 suggests a lack of forward-looking earnings growth, emphasising the urgency for strategic initiatives to address the root causes of the company's profitability downturn.

About the company

Cnergyico PK was incorporated in Pakistan as a public limited company on January 09, 1995 under the now repealed Companies Ordinance, 1984. The company currently operates two business segments, namely oil refinery business and petroleum marketing business. Petroleum marketing business was formally launched in 2007.

Credit: INP-WealthPk