Engro’s profit jumps 50% to Rs15.5b

Company declares cash dividend of Rs10 per share

KARACHI:

Engro Corporation reported a 50% increase in profit that reached Rs15.5 billion in the quarter ended September 30, 2020.

According to a notice sent to the Pakistan Stock Exchange on Friday, the company had registered a profit of Rs10.3 billion in the corresponding quarter of previous year. Earnings per share (EPS) of the company came in at Rs16.12 for Jul-Sept 2020 compared to Rs10.61 in the same quarter of last year.

Alongside the result, the company announced a cash dividend of Rs10 per share, taking cumulative dividend for the first nine months of 2020 to Rs24 per share.

“The dividend announcement was higher than industry expectations,” said Topline Securities’ analyst Sunny Kumar. During the Jul-Sept 2020 quarter, net sales of the company amounted to Rs75.3 billion, up 20% compared to Rs62.7 billion in the same quarter of 2019.

Among its subsidiaries, Engro Fertilisers’ earnings were up 111% year-on-year to Rs7 billion in the Jul-Sept 2020 quarter due to a 35% increase in urea sales and 90% jump in di-ammonium phosphate (DAP) demand.

Urea offtake during the quarter amounted to 616,000 tons while DAP offtake came in at 183,000 tons, Kumar said. Other income of Engro Corporation declined to Rs1.9 billion during the quarter under review compared to Rs3.9 billion in the same period of last year, a drop of 43.2%.

Finance cost fell 43% to Rs2.7 billion against Rs4.7 billion last year.

According to Taurus Securities’ analyst Nabeel Dochki, the result was well in line with industry projections except for finance cost, which declined 43% year-on-year and 48% quarter-onquarter on the back of a drop in Kibor and Libor.

Furthermore, the lower finance cost could also be attributed to a higher late payment surcharge of Engro Powergen Thar Private Limited, which was netted off from finance cost in case of Engro Energy Qadirpur Limited, the analyst said.

According to a report of Arif Habib Limited, the bottom line of Engro Polymer settled at Rs1.9 billion during the Jul-Sept 2020 quarter, up 48% year-on-year, on account of higher volumetric sales of PVC, which came in at 48,000 tons against 44,000 tons in the same period of last year.

Income from joint ventures and associates increased by a significant 70% to Rs804 million during the quarter amid contribution from the Sindh Engro Coal Mining Company and Engro Vopak Terminal, it said.

Nine-month figures Engro Corporation’s profit jumped 43.3% to Rs31.1 billion in nine months ended September 30, 2020 compared to Rs21.7 billion in the same period of previous year. EPS for the nine months came in at Rs31.84 against Rs22.43 in the same period of last year.