Pakistan's premier conglomerate, Engro Corporation announced its financial results for full year ended December 31, 2018. The Company posted a consolidated profit-after-tax (PAT) of Rs23,632 million - up by 45 percent, while PAT attributable to the shareholders increased to Rs12,708 million from Rs9,407 million during comparative period last year.
Engro Corporation completed 2018 with revenue of Rs171,568 million - 33 percent higher than Rs128,593 million last year. Increase was primarily driven by improved fertilizers and petrochemicals performance.
On a standalone basis, the Company posted a PAT of Rs12,720 million against Rs11,390 million for the last year, translating into an EPS of Rs24.28 per share. The Company announced a final cash dividend of Rs2.00 per share for the fourth quarter of 2018, bringing the cumulative dividend to Rs21.00 per share for FY 2018. In addition to this, the Company also announced the issuance of 10 percent bonus shares.
Fertilizer business revenues grew by 42 percent whilst PAT for the current period increased by 56 percent versus comparative period and stood at Rs17,414 million. The business witnessed an increase in revenue and profitability over the last year primarily due to both higher fertilizer off take and prices, coupled with one-off deferred tax reversal (non-cash) due to reduction in the corporate tax rate from 30 percent to 25 percent in the coming years. The domestic fertilizer industry continues to face challenges in recovery of subsidy receivables.
For the Polymer business, 2018 proved to be a year of economic consolidation. The business completed de-bottlenecking of PVC and VCM with strong operational performance, realized higher local sales and completed ground work for expansion projects while developing a strong balance sheet. The business achieved record PVC production, witnessed a 27 percent increase in revenue and posted a PAT of Rs4,930 million. However, the business faces gas supply risk which will need to be proactively managed.
Within Engro's Energy portfolio, Qadirpur Power Plant continued to demonstrate a billable availability factor close to 100 percent. Due to depletion of permeate gas from the gas field, net electrical output to the National Grid was lower as compared to last year. Circular debt has been a persistent problem whereby receivables from power purchaser remained high. This poses a continuous challenge for the business and the power sector in general and needs urgent attention from the relevant authorities.
The development of Thar Coal project continues at full pace and remained on schedule. During June 2018, coal from the first seam of the open-pit mine was extracted from a depth of 140 meters below the surface. On Thar Power Plant front, the project development continues at a steady pace. During the year, the power plant was successfully connected with the National Grid for the purpose of receiving back-feed required for plant start-up. In partnership with the Government, both projects are expected to remain on track for completion by mid-2019 to help resolve the energy demand in the Country.-PR
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