Engro Fertilizers’ profit jumps 31.5% to Rs3.25b

Board recommends cash dividend of Rs4 per share

KARACHI: Engro Fertilizers’ consolidated profit surged 31.5% to Rs3.25 billion for the second quarter ended June 30 due to higher sales and lower tax rate, according to a notification sent to the Pakistan Stock Exchange (PSX) on Friday.

“Earnings growth…lies above our expectations,” Topline Securities said in a comment to its clients.

The firm had booked a profit of Rs2.47 billion in the same quarter last year.



Accordingly, earnings per share (EPS) increased to Rs2.44 in the quarter compared to Rs1.85 in the same quarter last year.

The board of directors has recommended a cash dividend of Rs4 per share. The entitlement will be paid to the shareholders whose names will appear in the register of members on September 25, 2018.

Engro Fertilizers’ share price dropped 1.45%, or Rs1.18, to close at Rs80.24 with 3.90 million shares changing hands at the PSX.

Net sales surged 33% to Rs22.89 billion compared to Rs17.24 billion.

The surge in sales is seen due to increase in urea and DAP prices by 10% and 20%, respectively while selling and distribution cost went down 14% due to lower handling cost, the brokerage house added.

The rate of tax on profit slashed to 32.71% (Rs1.58 billion) in the quarter from 41.35% (Rs1.74 billion) in the corresponding period of last year.



Finance cost decreased 42% to Rs362.09 million as the company retired its short-term borrowings by utilising surplus cash, arising out of accrual of Gas Infrastructure Development Cess (GIDC).

Other income also slipped 75% to Rs509.38 million as the company recorded subsidy on urea for half of the quarter (as prices of urea were increased on May 7, 2018). Further, absence of cash subsidy on DAP is also another reason behind lower other income, it added.

Published in The Express Tribune, August 11^th, 2018.

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