Engro Corp’s Profit Declines by 48% in 9 Months of 2024

Engro Corporation Limited (PSX: ENGRO) announced its 9MCY24 financial result with a consolidated profit after tax of Rs. 11.983 billion (EPS: Rs. 22.33), depicting a decline of 48 percent YoY. On a quarterly basis, the consolidated earnings clocked in at Rs. 5.722 billion (EPS: Rs. 10.66), plunging by 53 percent YoY.

Alongside the result, the company announced a dividend of Rs. 5.00/share in 3QCY24 (Rs. 24.00/share in 9MCY24).

Revenue from continued operations grew by 12 percent to Rs. 279 billion during the 9 months, compared to Rs. 250 billion in the same period of 2023.

On the fertilizer business front, Engro Fertilizers Limited’s (PSX: EFERT) earnings settled at Rs. 8,554 million (EPS: Rs. 6.41), declining by 11 percent YoY during 3QCY24. According to Arif Habib Limited, this is due to i) a 33 percent and 14 percent YoY fall in urea and DAP offtake, respectively, and ii) higher finance costs amid a jump in short-term borrowings.

Meanwhile, Engro Polymer & Chemicals Limited (EPCL) registered a loss of Rs. 698 million (LPS: Rs. 0.77) compared to net profit of Rs. 2,642 million (EPS: Rs. 2.91) due to higher gas prices and subdued PVC margins.

FCEPL posted earnings of Rs. 766 million (EPS: Rs. 1.00), up 3x YoY on the back of an increase in gross margins by 190bps to 15.40 percent amid higher sales of dairy products.

The other income of ENGRO depicted a jump of 53 percent YoY during 3QCY24, which is attributable to a surge in income from cash and cash balances.

The finance cost of the company augmented by 41 percent YoY on the back of higher short-term borrowings.

The company booked a gain on allowance on subsidy receivable from Govt. amounting to Rs. 464 million in 3QCY24 against the gain allowance on subsidiary receivable from Govt. of Rs. 1 million in 3QCY23.

The company booked effective taxation at 39.95 percent in 3QCY24 vis-à-vis 40.54 percent in 3QCY23.

At the time of filing, ENGRO’s scrip at the bourse was Rs. 310.71, down 1.47 percent or Rs. 4.63 with 345,206 shares on Tuesday.