EFERT expected to declare good dividend in 3QCY20

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Engro Fertilizer Limited (EFERT) is scheduled to announce its 3QCY20 financial result on Oct 21st, 2020. We expect the company to post a profit after tax (PAT) of PKR 3,706mn (EPS: PKR 2.78) in 3QCY20 against PKR 3,326mn (EPS: PKR 2.49) in 3QCY19, portraying a growth of 11% YoY. The ascend in earnings is expected on the back of a massive surge in urea and DAP offtake by 35% and 95% YoY arriving at 0.6mn and 0.188mn tons, respectively.

Gross margins are expected to drop to 29% in 3QCY20 from 33% YoY in SPLY given Urea and DAP prices shrunk by 14% and 6% YoY, respectively. Moreover, financial charges are projected to decline by 41% YoY to PKR 716mn amid lower interest rate during the period. Other income is also expected to plummet by 72% YoY, clocking-in at PKR 339mn owed to fall in income from financial assets. Alongside the result we expect the company to announce a second interim cash dividend of PKR 3.0/share in 3QCY20 (PKR 7.0/share in 9MCY20). (AHL Research).

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