Engro Fertilizers Limited has announced its financial results for the first quarter that ended on March 31, 2020.
According to the notification to the PSX, the company booked a profit of just Rs. 570.74 million, declining by a massive 85.75% as compared with Rs 4.00 billion profit earned in Q1 2019.
The company’s sales were declined by 54.38% to Rs. 10.79 billion as compared to Rs. 23.65 billion recorded in the corresponding period of last year.
According to a report by Foundation Securities, Engro Fertilizer recorded its lowest-ever quarterly UREA sales since March 2012. It stated that the UREA sales declined to 165,000 tons, down 62% year on year and 74% quarter over quarter.
However, DAP sales decreased by 57% year on year and 86% quarter on quarter to just 33,000 tons in Q1 CY20 with decreased trading margins.
However, the cost of sales of the company was down to Rs. 7.15 billion from Rs. 16.05 billion, decreasing by 55.45%. This took the gross profit to Rs. 3.63 billion as compared with Rs. 7.59 billion.
Other income was down by 74.16% to Rs. 261 million as compared to Rs. 1.01 billion recorded in the same period last year. This was due to lower short term investments and the absence of a one-off capital gain on sale of land to Engro Polymer.
The finance cost, however, increased by 52% to Rs. 1.21 billion as compared to Rs. 798.96 million due to higher interest rates and exchange losses booked on foreign exchange denominated debt.
Furthermore, selling and distribution expenses declined by 35.58% to Rs. 1.05 billion as compared to Rs. 1.63 billion due to lower offtake. The administrative expenses surged by 27.4% to Rs. 358 million.
Earnings per share of the company decreased to Rs. 0.43 from Rs. 3.00.
In the last week of March, due to the COVID-19 pandemic, Engro Fertilizer reduced urea prices by Rs. 240 per bag to ensure national food security and support the farmers. This additional price cut resulted in an overall price reduction of Rs. 400 per bag since the beginning of the year.
EFERT’s share at the exchange was closed at Rs. 57.00, down by Rs. 0.82 or -1.42% with a turnover of 13.09 million shares.