Engro Corp’s profit soars nearly 1.5 times

Spike in income from other businesses drives earnings

KARACHI:

Engro Corporation’s profit rose nearly 1.5 times to Rs14.8 billion during the quarter ended March 31, 2021 due to a spike in profits from other businesses.

According to a notice sent to the Pakistan Stock Exchange (PSX) on Thursday, the enterprise had reported a profit of Rs5.9 billion in the same quarter of last year.

Accordingly, earnings per share of the firm amounted to Rs14.47 in the past quarter against Rs5.76 in the corresponding period of last year. Along with the result, the company announced an interim cash dividend of Rs12 per share.

Net sales of the firm rose 57.6%, going up from Rs45 billion last year to Rs70.9 billion in the period under review.

Selling and distribution expenses of the firm clocked-in at Rs1.7 billion during January-March 2021, which was 56.7% higher than Rs1.05 billion in January to March 2020.

On the other hand, administration expenses narrowed 16% to Rs1.26 billion in the past quarter. The amount under this head was recorded at Rs1.5 billion during the first three months of 2020.

A report from Arif Habib Limited stated that on the fertiliser business front, Engro Fertilisers’ bottom line arrived at Rs5.7 billion (EPS: Rs4.30), portraying a massive jump of 10.1 times year-on-year during 1QCY21. “This happened due to substantial growth in urea and DAP production by 3.5 times and 82% year-on-year, respectively and 27% year-on-year surge in DAP prices also drove earnings.”

Engro Polymer and Chemicals posted earnings of Rs4.1 billion (EPS: Rs4.56), hugely up by 21 times year-on-year as a result of 64% year-on-year ascend in PVC margins followed by higher production.

FrieslandCampinaEngro Pakistan Limited (FCEPL) reported a net profit of Rs623 million (EPS: Rs0.71) in 1QCY21 versus loss of Rs251 million (LPS: Rs0.17) during the same period of last year on the back of growth in gross margins by 475 bps, settling at 19.85% owed to higher volumes, and fall in finance cost amid lower interest rates.

Profitability of Engro Powergen Qadirpur Pakistan Limited (EPQL) settled at Rs399 million (EPS: Rs1.23) in 1QCY21 against Rs895 million (EPS: Rs2.77) during the same period of last year, plummeting 55% year-on-year due to absence of debt portion in sales. Other income of the company amounted to Rs2.4 billion during the quarter, down 29.1% compared to Rs3.4 billion in the same period of last year.

Meanwhile, finance cost dropped 40.5% to Rs3.6 billion during the January-March period of 2021. The finance cost had amounted to Rs6.1 billion in the corresponding quarter of the previous year.

During the day, Engro’s share price rose Rs3.66 to close at Rs301.8 with 757,792 shares changing hands at the PSX.

Published in The Express Tribune, April 23^rd, 2021.

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