Corporate results: Engro Fertilizers profit up 137%

Earns Rs3.4b in first half of calendar year.

Our Correspondent August 13, 2014


Engro Fertilizers – part of the Engro Corporation – has posted a net profit of Rs3.4 billion in the first half of the calendar year (1HCY14) ending on June 30 2014, up by a whopping 137% from Rs1.4 billion in the corresponding period of 2013.

Earnings per share (EPS) of the company jumped to Rs2.60 in 1HCY14 compared to an EPS of Rs1.10 in the same period of the previous year.

According to a BMA Capital report, the result was above its expected profit of Rs2.8 billion or an EPS of Rs2.17 owing to the higher other operating income recorded in the period.

The company’s top line witnessed a growth of 35% year-on-year to Rs27.7 billion due to improved gas supply to both fertiliser plants of the company. However, failure to pass on Gas Infrastructure Development Cess (GIDC) hike led to a 564 basis points (bps) decline in gross margin to 36%.

In the second quarter of the calendar year (2QCY14) alone, the company posted a net profit of Rs1.9 billion or an EPS of Rs1.40 compared to a profit of Rs1.4 billion or EPS of Rs1.11, up 26% quarter-on-quarter (QoQ).

The sales in 2QCY14 registered a decline of 14% quarter-on-quarter due to 13% lower urea offtake of 392,000 tons.

The QoQ growth in earnings is attributable to other income of Rs1.5 billion recorded in 2QCY14, where derivate instruments held by the company have led to the elevated other income, the report added.

In 2013, Engro Fertilizers posted a net profit of Rs5.5 billion or an EPS of Rs4.24 compared to a loss of Rs2.9 billion or loss per share of Rs2.26 in calendar year 2012.

Published in The Express Tribune, August 14th, 2014.

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