Uflex plummets 7% after reporting net loss of Rs 85 crore in December quarter

Uflex, one of India's leading flexible packaging companies, share price declined 7 percent in the morning session on February 15, a day after the company reported a loss in the December quarter of the financial year 2022-23.

The company reported a net loss of Rs 85 crore against a profit of Rs 313 crore in the same period a year ago.

At 12.13 pm, Uflex was trading at Rs 483.30 on the National Stock Exchange, down 5.52 percent from the previous day's close.

The primary reason for the loss was the devaluation of the Egyptian currency, which caused a loss of Rs 84 crore. During the third quarter, notional foreign exchange losses due to currency devaluation/fluctuations aggregated to Rs 236 crore.

The company manufactures BOPP, CPP and BOPET films at its Egypt plant through its wholly-owned subsidiary Flex P Films.

Rajesh Bhatia, the Group Chief Financial Officer of Uflex, cited the currency devaluation by Egypt and an increase in interest rates due to the US Fed real Reserve policies as the reasons for the significant impact on the financials.

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Despite the challenges faced by Uflex in the third quarter, Bhatia said the demand for packaging and packaging films in India remains strong.

Uflex's revenue from operations rose marginally to Rs 3482.72 crore from Rs 3463.42 crore in the corresponding quarter a year ago, with the rise in revenue due to higher sales volumes in packaging, which grew by 34.3 percent YoY.

The company's earnings before interest, depreciation and amortisation, tax and foreign exchange gain/loss also declined to Rs 429 crore from Rs 599 crore in the year-ago period.