Engro Corporation Limited (ENGRO) has unveiled its financial performance for the first half of CY23, showcasing a consolidated profit after tax of PKR 10,574 million (earnings per share: PKR 19.70). This marks a robust year-on-year increase of 43%. Delving into the quarterly results, the consolidated earnings for this period amounted to PKR 5,927 million (EPS: PKR 11.04), a substantial turnaround from the loss of PKR 558 million (LPS: PKR 1.04) incurred in the corresponding quarter. Adding to the announcement, the company has declared a cash dividend of PKR 2.00 per share for the second quarter of CY23, which accumulates to a total of PKR 42.00 per share for the first half of the year.
Key Points from the Results:
Fertilizer Business Performance: ENGRO’s fertilizer arm, EFERT, displayed a significant improvement in profitability during the second quarter of CY23. The segment reported a profit of PKR 1,060 million (EPS: PKR 0.79), in contrast to a loss of PKR 98 million (LPS: PKR 0.07) in the same period last year. This turnaround is attributed to a 44% surge in urea prices and a 6% increase in DAP prices year-on-year, alongside reduced deferred tax liability adjustments.
Engro Polymer & Chemicals Limited (EPCL): The net profit of EPCL in the second quarter of CY23 stood at PKR 1,562 million (EPS: PKR 1.72), reflecting a 33% decline compared to the previous year. This drop is attributed to lower international PVC margins, heightened finance costs, and an increase in gas prices.
Engro Powergen Qadirpur Pakistan Limited (EPQL): EPQL achieved a Profit after Tax of PKR 783 million (EPS: PKR 2.42) during the second quarter of CY23, marking a significant YoY increase of 3.1 times. This growth can be attributed to the application of a higher period weighting factor to capacity payments.
Frieslandcampina Engro Pakistan Limited (FCEPL): FCEPL achieved a bottom-line of PKR 336 million (EPS: PKR 0.44), indicating a substantial 36% year-on-year growth during the second quarter of CY23. This growth can be attributed to a 174 basis point improvement in gross margins, reaching 13.77%, driven by higher sales volumes.
Thar and Elengy Businesses: Contribution from the Thar business (EPTL & SECMC) and the Elengy business during the second quarter of CY23 are estimated to be PKR 4,479 million and PKR 752 million, respectively.
ENGRO witnessed a 22% YoY growth in other income during the second quarter of CY23, attributed to increased income from cash and cash balances. However, finance costs experienced a substantial 66% YoY growth due to higher interest rates.
Effective Taxation and Super Tax: The effective taxation for ENGRO in the second quarter of CY23 stood at 52%, compared to 88% in the same period of the previous year. This taxation includes an additional 6% super tax applied to the profit before tax for CY22 and 1HCY23.
ENGRO’s financial performance in the first half of CY23 reflects its resilience and capacity for growth, presenting a dynamic outlook for the company’s future endeavors.
ENGRO Corp June-2023 Financial Results
|( PKR mn )||1HCY23a||1HCY22a||YOY||2QCY23a||2QCY22a||YOY||QOQ|
|Net Sales||202,482||177,455||14 %||105,150||89 , 122||18 %||8 %|
|Gross Profit||61,217||54,173||13 %||35,654||26,955||32 %||39 %|
|Other income||13,751||9,623||43 %||6,896||5,637||22 %||1 %|
|Other expenses||3,245||6,431||-50 %||1,457||4,173||-65 %||-18 %|
|Finance Cost||22,496||12,002||87 %||11,391||6,874||66 %||3 %|
|PBT||39,773||37,090||7 %||26,151||16,285||61 %||92 %|
|PAT / ( LAT ) *||10,574||7,414||43 %||5,927||( 558 )||nm||28 %|
|EPS / ( LPS ) ( PKR )||19.70||13.82||11.04||( 1.04 )|
|DPS ( PKR )||42.00||23.00||2.00||11.00|
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