KARACHI: Engro Corporation announced a 9.5% decrease in profit to Rs5.9 billion for the quarter ended March 31, 2020 as expenses grew and earnings of subsidiaries declined.
The company had reported consolidated after-tax profit of Rs6.56 billion for the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange on Thursday. The board of directors of the company also announced interim cash dividend of Rs6 per share, ie 60%, for the quarter.
“The above entitlement will be paid to shareholders whose names appear in the register of members on Tuesday, June 9, 2020,” the notice added.
Earnings per share stood at Rs5.76 during the three-month (Jan-Mar 2020) period compared to Rs6.96 in the same quarter of last year.
The company’s topline grew 11% to Rs45 billion in the period under review from Rs40.6 billion in the previous year. Other operating expenses jumped 85% to Rs1.75 billion compared to Rs944.4 million in the previous year.
According to a Topline Securities’ report, expenses increased mainly due to the implementation of IFRS-16, expense related to the leadership academy and pilot projects on tower business.
“Among the subsidiaries, Engro Fertilisers Limited’s earnings were down by 86% year-on-year during 1Q2020 due to lower volumetric sales amidst higher prices compared to its peers.” Similarly, Engro Polymer’s earnings were also down due to decline in sales amid closure of the plant due to gas leakage and Covid-19 outbreak.
FrieslandCampina Engro Pakistan also recorded a loss of Rs251 million in 1Q2020 compared to profit of Rs813 million in 1Q2019 mainly due to decline in gross margins and higher finance cost.
Finance cost of Engro Corp surged by a massive 300% to Rs6.1 billion in the three-month period under review.
Engro Corporation’s share price rose Rs6.48 or 2.2% to trade at Rs301.64 with a volume of 818,681 shares on Thursday.
Published in The Express Tribune, April 24th, 2020.
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