Engro Corp’s profit falls 27% to Rs11.4b

Jump in other expenses, finance cost drives decline in earnings

KARACHI:

Engro Corporation’s profit contracted 26.7% to Rs11.4 billion during the quarter ended September 30, 2021 owing to a spike in other expenses and finance cost.

According to a notice sent by the company to the Pakistan Stock Exchange (PSX) on Friday, it had posted a profit of Rs15.5 billion in the same quarter of previous year.

Earnings per share of the enterprise dropped from Rs16.12 during July-September 2020 to Rs10.62 in the same quarter of current year.

Alongside the result, the company announced a cash dividend of Rs5 per share, which took the total dividend for nine months (January-September) of calendar year 2021 to Rs24 per share.

Net sales of the company jumped from Rs75.3 billion in the third quarter of 2020 to Rs84.3 billion in the corresponding quarter of ongoing year, an increase of 12%.

During the quarter under review, selling and distribution expenses of the firm contracted 16.2% to Rs1.97 billion. It had recorded an outflow of Rs2.35 billion under the same head in the corresponding period of previous year.

Similarly, administrative expenses dropped 15% from Rs1.7 billion during July-September last year to Rs1.5 billion in July-September 2021.

The company registered a 15% increase in other income as it amounted to Rs2.2 billion during the three months under review against Rs1.9 billion in the corresponding quarter of previous year.

Other operating expenses soared 931% to Rs2.4 billion in the July-September 2021 quarter. The company had spent Rs232.2 million under the same head in the same period of previous year.

Finance cost rose from Rs2.7 billion during July-September 2020 to Rs3.6 billion in July-September 2021, a jump of 34%.

“On the fertiliser business front, Engro Fertilisers’ profit came in at Rs4.4 billion, down by 37% year-on-year, during 3QCY21 given the fall in urea and DAP offtake by 9% and 46% respectively,” stated a report of Arif Habib Limited.

The bottom line of Engro Polymer and Chemicals stood at Rs3.1 billion, up by 65% year-on-year, in 3QCY21 amid higher polyvinyl chloride (PVC) volumetric sales (64,000 tons) and historic PVC prices, it said.

The report added that Engro Powergen Qadirpur Pakistan Limited (EPQL) posted a net profit of Rs558 million in 3QCY21 against Rs722 million in the same period of last year, declining by 23% year-on-year due to the absence of debt portion.

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

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.