Engro’s profit jumps 45% to Rs44.4 billion

Company announces final cash dividend of Rs2 per share

KARACHI:

Engro Corporation’s profit soared 45.1% to Rs44.4 billion in the year ended December 31, 2020 compared to earnings of Rs30.6 billion in 2019, according to a notice sent by the company to the Pakistan Stock Exchange on Thursday.

Earnings per share (EPS) of the company came in at Rs43.57 in 2020 compared to Rs28.69 a year ago.

Alongside the result, the company announced a final cash dividend of Rs2 per share, taking the full-year dividend to Rs26 per share.

Net sales of the company rose 10.21% from Rs225.8 billion in 2019 to Rs248.8 billion in 2020. Cost of sales increased from Rs157.2 billion in 2019 to Rs172.8 billion in the year under review, a rise of 9.92%.

The company reported gross profit of Rs76 billion in 2020, up 11% compared to Rs68.6 billion in 2019. Engro Corporation’s finance cost rose 38.79% to Rs20.5 billion in 2020 against Rs14.8 billion last year.

Among its subsidiaries, Engro Fertilisers’ (EFERT) earnings went up 4% year-on-year to Rs6.64 million in 4QCY20 due to a 7% increase in di-ammonium phosphate (DAP) sales and re-measurement gains on provision of gas infrastructure development cess (GIDC) worth Rs2.12 million.

Arif Habib Limited analyst Tahir Abbas in a report said the profit of Engro Polymer and Chemicals (EPCL) stood at Rs3.62 million (earnings per share Rs3.99) owing to a 52% year-on-year climb in PVC margins tagged with re-measurement gains on GIDC provision of Rs680 million in 4QCY20.

Furthermore, Engro Powergen Qadirpur Pakistan posted a bottom line of Rs48 million in 4QCY20, down 93% year-on-year against Rs792 million in the same period of last year. The report added that additionally FrieslandCampina Engro Pakistan Limited (FCEPL) posted a loss after tax of Rs145 million (loss per share of Rs0.19) in 4QCY20 as compared to loss after tax of Rs146 million (LPS of Rs0.29) in the same period of last year.

“We do highlight that the company (Engro Corp) posted lower other expenses at Rs2.4 billion in 4QCY20 (Rs3.9 billion in the same period of last year) as it booked an impairment loss of Rs1.2 billion on its investment in FrieslandCampina Engro Pakistan Limited in CY19,” the report added.

The company booked effective taxation at 17% during 4QCY20 compared to 33% in 4QCY19 owing to reversal of provisions by Engro Fertilisers.

“We have a buy stance on Engro with December 2021 target price of Rs411 per share,” the analyst added.

During the day, Engro Corporation’s share price decreased Rs7.89 to Rs302.02 with trading in 943,562 shares at the Pakistan Stock Exchange.

Published in The Express Tribune, February 19^th, 2021.

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