corporate result: Engro Fertilizers’ profit jumps 137% to Rs3.89 billion

Earnings were higher than market expectations

KARACHI: Engro Fertilizers Limited announced earnings of Rs3.89 billion in the quarter ended March 31, up 137.5% on account of higher fertiliser sales. The company had reported earnings of Rs1.64 billion in the same quarter of the previous year.

The results were higher than market expectations with earnings per share (EPS) amounting to Rs2.91 in the quarter under review compared to Rs1.23 in the previous year.

“The EPS are above market expectations. The expectation was that the EPS would be between Rs2 to 2.5 for the quarter,” Saqib Hussain of Sherman Securities told The Express Tribune.

Accordingly, the company’s share price increased Rs1.36 on Friday, closing at Rs72.82 with over 5.7 million shares changing hands.

The main reason for this significant increase in the bottom-line is that the company is said to have switched production to its new plant, as it has been enjoying tax holiday in some forms at its new plant. According to Fertiliser Policy 2011, companies that establish new plants would be awarded certain reliefs.

Engro Fertilizers recorded net revenues of Rs18.22 billion for the quarter as compared to Rs10.06 billion for the corresponding period last year, demonstrating a 81% increase in sales. Increase in sales is attributed to higher urea and DAP sales, which increased by 85% year-of-year and 45% year-on-year, respectively.

Finance cost went substantially down by 24% to Rs524 million, owing to the successful re-profiling of various loans in previous quarters and continuous deleveraging of the balance sheet.

Published in The Express Tribune, April 21^st, 2018.

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