Engro Corp posts spectacular turnaround in earnings
Company’s profits helped along by revival in fertiliser business.
Strong bottom-line growth contributed to the surge in profitability. PHOTO: FILE
KARACHI:
Engro Corporation, arguably Pakistan’s most prominent business conglomerate, has swung back into profitability in the first quarter of 2013 (1QCY13) after posting significant losses in the same period of the preceding year. Engro’s net profit summed up to Rs1.8 billion in 1QCY13, as compared to a loss of Rs650 million in the corresponding period last year, according to results released to the Karachi Stock Exchange.
Notwithstanding the spectacular turnaround, most investors were left slightly disappointed, as analysts had expected the company to do even better. A research note issued by Farid Aliani from BMA Capital Management says the lower profits can be attributed to a Rs200 million rise in selling and distribution expenses, which he attributes to Engro’s rice business, and a Rs150 million surge in financial charges.
Analysts unanimously said the corporation’s bounce back to profitability was driven primarily by a turnaround in its fertiliser business, which forms the core of its operations. Strong bottom-line growth in Engro Foods and Engro Eximp subsidiaries contributed to the surge in profitability. Aliani pointed out that Engro Eximp, which deals with the rice business, procured three times more rice in 1QFY13 as compared to the same period of the preceding year.
As regards Engro Fertilizers: “The company’s fully-owned subsidiary ran its new plant during 1QCY13, resulting in efficient production. This, coupled with favourable agricultural conditions, strengthened its urea sales, improving them four-fold,” said Asad I Siddiqui from Topline Securities.
Published in The Express Tribune, April 30th, 2013.
Like Business on Facebook to stay informed and join in the conversation.
Engro Corporation, arguably Pakistan’s most prominent business conglomerate, has swung back into profitability in the first quarter of 2013 (1QCY13) after posting significant losses in the same period of the preceding year. Engro’s net profit summed up to Rs1.8 billion in 1QCY13, as compared to a loss of Rs650 million in the corresponding period last year, according to results released to the Karachi Stock Exchange.
Notwithstanding the spectacular turnaround, most investors were left slightly disappointed, as analysts had expected the company to do even better. A research note issued by Farid Aliani from BMA Capital Management says the lower profits can be attributed to a Rs200 million rise in selling and distribution expenses, which he attributes to Engro’s rice business, and a Rs150 million surge in financial charges.
Analysts unanimously said the corporation’s bounce back to profitability was driven primarily by a turnaround in its fertiliser business, which forms the core of its operations. Strong bottom-line growth in Engro Foods and Engro Eximp subsidiaries contributed to the surge in profitability. Aliani pointed out that Engro Eximp, which deals with the rice business, procured three times more rice in 1QFY13 as compared to the same period of the preceding year.
As regards Engro Fertilizers: “The company’s fully-owned subsidiary ran its new plant during 1QCY13, resulting in efficient production. This, coupled with favourable agricultural conditions, strengthened its urea sales, improving them four-fold,” said Asad I Siddiqui from Topline Securities.
Published in The Express Tribune, April 30th, 2013.
Like Business on Facebook to stay informed and join in the conversation.