Engro maintains profitability at Rs14.89bn, reports payment of Rs12/sh

April 21, 2022 (MLN): Engro Corporation Limited (ENGRO), one of Pakistan’s largest conglomerates with the company’s business portfolio across four verticals, which include Food & Agribusiness, Petrochemicals, Power & Infrastructure and connectivity, today announced its financial performance in which the company maintained its net profit for Q1 CY22 at Rs14.89 billion (EPS: Rs13.84).

Along with the result, the company announced an interim cash dividend for the quarter ended March 31, 2022, at Rs12 per share, or 120%.

According to the company’s financials, higher other operating expenses (up 2.4x year-on-year) and lower profitability in the Fertilizer and Energy businesses kept Engro’s profitability in check.

In the field of fertilizers, EFERT (the largest contributor to ENGRO’s earnings) saw a drop in profitability of 4% YoY to Rs 5.5 billion (EPS: Rs 4.13) during 1QCY22 due to the end of the flow of concession gas and a drop in Urea sampling.

Similarly, Engro Powergen Qadirpur Limited (EPQL) recorded a post-tax profit of Rs 151 million (EPS: Rs 0.47) during 1QCY22, representing a 62% year-on-year decline from net profit of Rs 399.2 million due to margins weaker brutes.

The net result of Engro Polymer & Chemicals Limited (EPCL) stood at Rs4.71 billion (EPS Rs5.19), representing a 14% year-on-year increase from Rs4.14 billion (EPS: Rs4.56) at 1QCY21, mainly driven by higher volumetric sales .

On the food industry front, FrieslandCampina Engro Pakistan Limited (CEPF) earnings increased by 21% year-on-year to Rs663.7 million on 1 QCY22 due to strong volumetric growth across all categories.

Overall, ENGRO recorded notable revenue growth of 24.6% year-on-year to Rs 88.3 billion during the reporting period, mainly driven by higher revenue from Fertilizers, Chemicals and other activities. However, the company’s gross margins fell from 35% to 31% during the said period.

The company’s finance cost rose 43% year-on-year to Rs 5 billion due to higher borrowing and interest rates.

The profit share of JV was recorded at Rs998 million, down 3% year-on-year, mainly due to poor power performance Business.

Among other items, other income rose 63.5 percent year-on-year to 3.9 billion rupees, while tax expenditure remained nearly flat at 5.9 billion rupees.

With that, the company’s effective tax rate remained static at 28% during the reporting period.

Consolidated financial results for the quarter ended March 31, 2022 (in thousands of rupees)

March 22

March 21st

% Switch

Net revenue

88,333,240

70 866 193

24.65%

Revenue cost

(61,115,604)

(46,050,048)

32.72%

Gross profit

27,217,636

24,816,145

9.68%

Distribution and sales costs

(1,888,654)

(1,656,524)

14.01%

Administrative expenses

(1,670,585)

(1,261,150)

32.47%

Other income

3,986,005

2,438,052

63.49%

Other operating expenses

(2,699,740)

(1,131,788)

138.54%

Operating result

24,944,662

23,204,735

7.50%

Financial cost

(5,127,664)

(3,589,096)

42.87%

Revenue share of JV and associates

988 329

1,018,656

-2.98%

Profit before tax

20,805,327

20,634,295

0.83%

Taxation

(5,907,862)

(5,855,604)

0.89%

Profit from continuing operations

14,897,465

14,778,691

0.80%

Profit/(loss) from discontinued operations (attributable to owners of the holding company)

238

302

-21.19%

profit of the year

14,897,703

14,778,993

0.80%

Earnings/ (loss) per share – basic and diluted (rupees)

13.84

2:47 p.m.

-4.35%

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Published on: 2022-04-21T14:21:24+05:00

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