Corporate results: Engro Fertilizers posts Rs2.12b profit

Earnings fall 30.7% as a result of decline in urea sales and prices

Our Correspondent April 26, 2016
Earnings fall 30.7% as a result of decline in urea sales and prices. PHOTO: FILE

KARACHI: Engro Fertilizers has announced a consolidated profit of Rs2.12 billion for the quarter ended March 31, 2016, down 30.7% compared to Rs3.06 billion in the same quarter of previous year, according to a company notice sent to the Pakistan Stock Exchange on Monday.

Earnings per share (EPS) came down to Rs1.59 compared to Rs2.3 last year.

The result was higher than market consensus estimates, Topline Securities commented in its report. The KSE 100-share index closed at 33,684 on Monday, down 54 points or 0.16%, while Engro Fertilizers’ stock fell 0.35% at Rs69.45.

In the first quarter of 2016, revenues of the company dropped 29% year-on-year (YoY) to Rs12.6 billion in the wake of decline in both urea sales and prices. The demand for urea and di-ammonium phosphate (DAP) was expected to have declined while prices had also gone down.

Gross margins improved slightly to 39% in the January-March quarter compared to 38% in the same quarter last year because of production at the Enven fertiliser plant and supply of subsidised gas, which began in March last year.

“However, if we exclude Enven, the margins of Engro Fertilizers may have been squeezed due to higher fuel and feedstock prices,” the report said. Distribution cost fell 22% YoY to Rs856 million during the Jan-Mar quarter primarily due to lower sales. Financial charges decreased 40% to Rs753 million owing to balance sheet deleveraging and lower interest rates.

Other income dropped 65% due likely to decline in the company’s cash and short-term investment following the repayment of gas infrastructure development cess backlog.

Nestle records Rs3.4b profit

Nestle Pakistan - one of the leading food companies - posted a net profit of Rs3.44 billion in the quarter ended March 31, 2016, down 6.27% compared to Rs3.67 billion in the same period of last year, according to a company notice sent to the Pakistan Stock Exchange.

EPS fell to Rs75.89 from Rs81.01. Nestle’s share price stood at Rs7,200 at the close of trading on Monday, down 3.17%.

Published in The Express Tribune, April 26th,  2016.

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