Engro Fertilizers’ earnings stand at Rs1.6bn in 2QCY24, up 57% YoY

Engro Fertilizers Limited (EFERT), a wholly-owned subsidiary of Engro Corporation Limited, posted a profit after tax (PAT) of Rs1.66 billion for the second quarter ended June 30, 2024, an increase of 57% as compared to Rs1.06 billion recorded in the same period of the previous year, showed the company’s consolidated financial results posted at the Pakistan Stock Exchange (PSX) on Wednesday.

The profit translates into earnings per share (EPS) of Rs1.25 in 2QCY24, in comparison to an EPS of Re0.79 recorded in the same period of the previous year.

“The below-expected results for 2QCY24 are also due to higher finance costs in addition to lower margins,” JS Global said in its notice.

The Board of Directors (BoD) of EFERT in its meeting held on June 30, also announced an interim cash dividend for the second quarter at Rs3 per share i.e. 30%. This is in addition to the interim cash dividend already paid at Rs8 per share i.e. 80%.

Engro Fertilizers’ earnings hit Rs26.2bn in 2023, up 64% YoY

On a consolidated basis, Engro Fertilizers’ revenue grew by nearly 3% to Rs39.42 billion in 2QCY24 from Rs38.38 billion in 2QCY23.

However, despite the increase in revenue, the fertilizer manufacturer’s gross profit declined significantly by 38% to Rs7.13 billion as compared to Rs11.42 billion. This was due to a 20% YoY jump in cost of sales during the 2QCY24.

As a result, the profit margin reduced to 18.1% in 2QCY24, down from 29.8% in the preceding year.

EFERT’s interest expense increased by 74% to reach Rs1.2 billion in 2QCY24, as compared to Rs702 million in same period of the previous year. The rise in finance cost can be attributed to an increase in interest rate during the period.

Consequently, the company posted a profit before tax (PBT) of Rs2.56 billion in 2QCY24, a decrease of 64%.

During the period, the company paid Rs893 million in taxes in 2QCY24, far lower than Rs6.06 billion in same period last year.