Engro Corporation on Friday announced 2013 full year profit of Rs 8.2 billion (Rs 16.01 per share) as against profit of Rs 1.3 billion (Rs 2.61 per share) in same period last year, up 5.1x. Company announced specie dividend in the ratio of 1:10 (1 share of EFERT for every 10 shares of Engro), according to review released by Topline Securities.
After witnessing adverse operating environment in 2012, turnaround in its flag ship urea business in 2013 provided addition imputes to the holding company’s profitability. Profit of Rs 9.9 per share came from Engro Fertilizers. This more than made up for the decline in profitability coming in from Engro Foods, which contributed Rs 1.5 per share in Engro Corp’s EPS, it stated.
The company’s new fertilizer plant operated for full year in 2013 and during 2H2013 both plants were operational as gas from Guddu power plant was being diverted to Engro Fertilizers. This resulted in efficient production and with favourable agricultural conditions strengthened its urea sales by more than 66 per cent, it mentioned. Engro Corp’s overall revenues grew by 24 per cent to Rs 155 billion while cost of sales was up by 19 per cent, as a result Engro Crop posted healthier gross margins at 26 percent, up 3pps. Due to lower interest rate scenario, company’s financial cost was down by four percent to Rs 16.8 billion versus Rs 17.5 bn in the same period last year, the document stated. “On quarter on quarter basis, the company’s earnings were up by 28 percent to Rs 2.3bn (Rs 4.43 per share) as against Rs 1.8bn (EPS 3.47) in the same period last year. At current levels, we maintain ‘Hold’ on the scrip”, the Topline suggested.
