Earnings per share (EPS) increased to Rs6.29 compared to Rs4.66 in the previous year. STOCK IMAGE
Engro Fertilisers on Monday announced a net profit of Rs8.2 billion in calendar year 2014, up by a significant 49% compared to Rs5.5 billion in the previous year.
Earnings per share (EPS) increased to Rs6.29 compared to Rs4.66 in the previous year.
“The earnings came higher than our estimate because of lower-than-anticipated other operating expenses,” Global Research said in a report.
“Likely reason for such deviation was the exclusion of embedded derivative charges by the company from the said expense,” said the report.
Moreover, the company restated its 2013 other operating expenses from Rs2.06 billion to Rs858 million.
A significant improvement in the company’s profitability came from the 17% year-on-year (YoY) increase in volumetric growth in urea sales on the back of higher production. In addition to this, a 33% YoY decline in financial charges and 113% YoY jump in other income enabled the company to post higher profitability.
For the fourth quarter of 2014, the company’s earnings were Rs2.7 billion or EPS of Rs2.05, depicting a 19% YoY growth.
Along with the result, Engro Fertilisers’ board of directors approved a final cash dividend of Rs3 per share for calendar year 2014, which was higher than the street estimates, the report said.
For 2014, the company’s revenues grew 23% YoY to Rs61.43 billion against Rs50.13 billion booked during last year.
This improvement stems from volumetric growth in urea sales and 8% YoY increase in fertiliser prices.
On a quarter-on-quarter basis, the revenues were registered at Rs17.73 billion during the fourth quarter against Rs15.70 million in the same period of previous year.
Gross margins eroded by 7.3% to 36.8% during calendar year 2014 due to the incomplete pass through of Gas Infrastructure Development Cess (GIDC) hike to end-consumers.
Similarly, on a quarter-on-quarter (QoQ) basis, gross margins stood at 37.7% during the fourth quarter.
Financial charges declined by 33% YoY to Rs6.63 billion in 2014. The reduction in finance cost largely comes from significant debt repayments and exchange gains on un-hedged dollar-denominated loan because of the rupee appreciation in the year.
For the fourth quarter, financial charges were Rs1.66 billion.
Other income improved by 113% YoY to Rs2.45 billion in 2014 against Rs1.15 billion earned last year.
The improvement in the company’s other income can be attributed to a better cash flow generation because of two plants being operational during the period.
For the fourth quarter, other income depicted a growth of 47% YoY to Rs794 million because of heavy investment in marketable securities.
Published in The Express Tribune, February 10th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS (1)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ