Corporate earnings: Engro posts mixed results

Diversification and increase in milk products led to the resurgence of Engro Foods along with increase in rice exports

KARACHI:

Despite making a profit in most of its divisions, Engro Corp faced anaemic growth in the first half of 2011, amounting to negative growth in net profit, according to the group’s unconsolidated accounts released by the conglomerate. The local giant’s net profit fell to Rs3.38 billion in the first half of 2011 compared with Rs3.4 billion in the preceding year.

The fertiliser wing faced unprecedented difficulties due to gas curtailment during the period under review, according to the company review released on Monday.

Fertiliser production actually fell by 0.18 million tons, but Engro still managed to achieve a positive growth rate, with a profit of Rs2.175 billion, buoyed by a rise in fertiliser prices, according to sector-wise accounts.

Engro Foods recovered handsomely from last year’s dismal first half losses of Rs180 million to make a profit of Rs218 million. A diversification and increase in milk products led to the resurgence coupled with a six-fold increase in rice exports, data shows.

Engro’s power generation subsidiary Powergen plays a minute role in the country’s power sector, however, it still managed to report profits of Rs745 million, almost a 100 per cent jump from last year’s profits. The growth was due to Qadirpur power facility being operational for the entire six months during the period under review against only three months in the same period last year.

The petrochemical division recovered to post losses of Rs195 million against Rs449 million losses posted last year. Avanceon, Engro’s industrial automation division posted similar trends, with a consolidated loss of Rs65 million, decreasing a third from last year.

Published in The Express Tribune, August 16^th, 2011.