⚡ Flash Summary

Cnergyico Pk Limited’s report for the period ended September 30, 2025, reveals a mixed performance. While gross and net sales increased compared to the same period last year, the company reported a loss after tax. This loss was primarily attributed to depreciation expenses, despite a decrease in finance costs due to lower KIBOR rates. Management expresses concern over declining demand for Furnace Oil (FO) due to government levies and shifts towards alternate energy sources, pushing them to export FO at a loss.

📌 Key Takeaways

• ⬆️ Gross sales increased to PKR 81.6 billion, up from PKR 73.6 billion last year.
• ⬆️ Net sales reached PKR 61.6 billion compared to PKR 57.1 billion in the prior period.
• ⬆️ Gross profit improved to PKR 931 million from PKR 329 million.
• ⬆️ EBITDA increased to PKR 2.08 billion, up from PKR 1.39 billion.
• ⬇️ Finance costs decreased by 31% due to lower KIBOR rates (from 18% to 11%).
• ⚠️ Loss after tax reported at PKR 589 million due to depreciation expense.
• 📉 Basic/diluted loss per share was Rs. 0.11 compared to a loss of Rs. 0.29 last year.
• 📉 Average monthly consumption of Furnace Oil (FO) continues to decline.
• Export sales include Rs. 7,756.500 million
• 🏦 The company has commitments for capital expenditure in the amount of PKR 4,863,299,000.
• ⚠️ Exchange losses are a concern for crude oil and petroleum importers due to differences in pricing formulas and settlement rates.
• ⚠️ Government policies on sales tax and petroleum levies pose ongoing challenges.

🎯 Investment Thesis

Given the current losses, reliance on a declining product (Furnace Oil), and ongoing regulatory challenges, a HOLD recommendation is appropriate. A price target cannot be reliably established until the company demonstrates sustained profitability and resolves its issues with government levies. Time horizon is dependent on the turnaround strategy’s success, likely requiring a long-term perspective.