Engro Corp’s profit surges 38% to Rs6.8b

Robust sales, contribution by fertiliser business aided growth

Our Correspondent October 20, 2018
Robust sales, contribution by fertiliser business aided growth. PHOTO: FILE

KARACHI: Engro Corporation's consolidated profit surged 38% to Rs6.79 billion in the quarter ended September 30, 2018 mainly due to robust sales, according to a bourse filing on Friday.

The conglomerate had registered a profit of Rs4.92 billion in the same quarter last year.

Accordingly, earnings per share increased to Rs7.36 in the Jul-Sept 2018 quarter compared to Rs5.99 in the corresponding quarter of last year, the company reported to the Pakistan Stock Exchange (PSX).

The board of directors recommended an interim cash dividend of Rs7 per share, which would be paid to the shareholders whose names appear in the register of members on November 26, 2018. The entitlement is in addition to a previous interim dividend of Rs12 per share that was already paid.

Engro Corp's share price dropped 1.24%, or Rs3.77, and closed at Rs300.68 with 1.32 million shares changing hands at the PSX where the benchmark KSE-100 index improved 1.18%, or 448.02 points, and closed at 38,430.27.

The corporation recorded net revenue of Rs42.91 billion, which was 25.5% higher than Rs34.18 billion in the corresponding period of previous year.

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On the flip side, selling and distribution expenses surged to Rs2.05 billion compared to Rs1.83 billion last year. Administrative expenses rose to Rs1.69 billion compared to Rs997.88 million. Finance cost improved to Rs1.20 billion as opposed to Rs1.04 billion last year.

Besides, other income dropped to Rs1.45 billion compared to Rs2.01 billion. Share of income from joint ventures and associates dropped to Rs305.23 million in the Jul-Sept 2018 quarter compared to Rs445.81 million in the same quarter last year.

Topline Securities' analyst Shankar Talreja said, "Engro Corporation announced…higher earnings (on the back of) contribution from fertiliser and petrochemical businesses, up 81% year-on-year and 20% year-on-year respectively."

Fertiliser business (Engro Fertilizers) showed a robust performance on the back of improved urea prices coupled with lower discounts. Similarly, the petrochemical business performance improved due to cost efficiency where the company successfully curbed its breakeven level to $175 per ton, he said.

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In addition to this, consolidated administrative expenses soared 70% where a substantial increase was seen in its core operations with a rise in cost of 124%. Higher admin cost was due to ongoing assignments of the company and the same cost will be recovered after completion of those assignments, he said.

Published in The Express Tribune, October 20th, 2018.

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