The board of directors of Engro Corporation Limited has announced the achievement of the company; highest-ever profit after tax of Rs 8.06 billion for the year ended December 31, 2011. The company's board of directors approved a final cash dividend of 20 percent ie Rs two per share, making a total dividend of Rs six per share for 2011. The board has also recommended issuance of 30 percent bonus shares (three shares for every 10 shares held).
Overview of 2011 The consolidated revenue stood at Rs 114.6 billion for the year ended December 31, 2011 as compared to Rs 79.9 billion in 2010. The company announced earnings per share of Rs 20.50 for 2011, as compared to an EPS of Rs 17.27 in 2010.
Business Review
Fertiliser In 2011, urea demand declined to 5.9million tons from 6.1million tons in 2010 due to reduced supply on account of severe gas shortage. With Engro expansion project (Enven's) commissioning, the business produced 1,279 tons of urea and sold 1,263 tons, achieving a market share of 21 percent. The phosphate industry declined to 1.1 million tons in 2011 from 1.4 million tons in 2010 with the business selling 336,000 tons of phosphate against 328,000 tons in 2010, achieving a market share of 29 percent. The fertiliser manufacturing and trading businesses achieved a total profit of Rs 6,251 million during 2011, 12 percent growth over the year 2010. The business, through its operating leverage, also retired Rs six billion of debt throughout the calendar year 2011 and is well on its way to deleverage its balance sheet.
Foods In 2011, the foods business achieved volume growth of 22 percent in the dairy segment, securing a market share of 44 percent as opposed to 39 percent in 2010. During the first half of the year, in May 2011, the food business raised Rs 1.2 billion by issuing 48 million shares to institutional investors - mainly US and UK mutual funds - and local investors.
The shares were issued at a price of Rs 25 per share. Mirroring its success in the local market, the business made its foray in the international arena with acquisition of Al-Safa - a leading Halal meat brand in North America - at a total cost of $6.3 million in April 2011. The food business continued to expand its infrastructure and product portfolio to meet consumer needs and achieved a profit after tax of Rs 891 million during 2011 as compared to Rs 177 million during 2010.
Petrochemicals The petrochemical business production was lower than the capacity due to limited availability of VCM and some operational constraints. However, by the end of the fourth quarter, the plant overcame significant teething problems and now is in better shape with VCM capacity utilisation up to 99 percent. During the year, the company produced 122,000 tons of PVC as compared to 114,000 tons in 2010. The business, however, incurred an after tax loss of Rs 706 million due to unstable VCM operations in the first three quarters and lower international PVC-Ethylene margin in the fourth quarter.-PR