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Engro Fertilizers’ Profit Declines by 20% in 1st Quarter of 2023

Engro Fertilizers Limited (PSX: EFERT) has reported a profit after tax (PAT) of Rs. 4.4 billion in the quarter that ended on March 31, the calendar year 2023.

According to the company’s consolidated financial results, the company’s profit declined by 20 percent year-on-year (YoY) from Rs. 5.51 billion reported in the same period last year (SPLY).

EFERT announced an interim cash dividend of Rs. 3.50 per share (i.e. 35 percent) for the quarter. It didn’t announce any bonus payouts or right shares for the period in review.

Net sales during 1QCY23 clocked in at Rs. 43.99 billion, up by 19.5 percent YoY from Rs. 36.81 billion recorded in 1QCY22.

During January-March, the EFERT’s gross margin arrived at 24 percent, down by 5ppts year on year due to escalating inflation and an increase in gas cost, according to Ismail Iqbal Securities while the selling and distribution expenses jacked up by 22.4 percent YoY.

Other income has gone up by 40 percent YoY to Rs. 717 million on the back of investment in Pakistan Investment Bonds (PIBs) in December 2022, according to Ismail Iqbal Securities.

The finance cost of the company was reduced by 8.3 percent YoY to Rs. 435.3 million during 1QCY23 amid fertilizer production issues due to delays in letters of credit (LCs) for raw material imports and unplanned plant shutdowns.

Other operating expenses increased by 36.2 percent YoY from Rs. 611 million in January-March 2023 compared to Rs. 448 million in 1QCY22.

EFERT paid Rs. 2.38 billion in taxes during the quarter. To recall, the company paid Rs. 2.16 billion in taxes during the corresponding period last year. This translates into effective taxation at 35 percent for the quarter in review, compared to industry estimates of 33 percent.

EFERT posted earnings per share of Rs. 3.30 per share for 1QCY23, down by 20.1 percent compared to 4.13 in the SPLY.

At the time of filing, EFERT’s scrip at the bourse was closed Rs. 86.43, down by 0.22 percent or Rs. 0.19 with a turnover of 904,606 shares on Monday.

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