Engro Corporation Limited (ENGRO) is anticipated to announce its 1QCY22 financial result on 21st Apr’22, where we expect company’s consolidated earnings to be stable at PKR 8,348mn (EPS: PKR 14.49). On the fertilizer business front, EFERT’s net profit settled at PKR 5,511mn (EPS: PKR 4.13), down 4% YoY during 1QCY22 amid to i) fall in gross margin by 975bps YoY, settling at 29.50% since company is accruing industrial feed gas rate at EnVen plant as concessionary gas period has ended on 30th Jun’21 and ii) jump in finance cost due to higher interest rates.

Whereas, bottom-line of Engro Polymer & Chemicals Limited (EPCL) clocked-in at PKR 4,714mn (EPS: PKR 5.19), up by 14% YoY, which is comes on the back of higher volumetric sales along with higher PVC prices (+6% YoY). Whereas, Engro Powergen Qadirpur Pakistan Limited (EPQL) posted a Profit after Tax of PKR 151mn (EPS: PKR 0.47) in 1QCY22 compared to PKR 399mn (EPS: PKR 1.23) during SPLY, down by 67% YoY.

Alongside this, we expect the bottom-line of Elengy business to settle at PKR 668mn, with an assumption of handling of ~614/mmcfd of RLNG during 1QCY22, as per our estimates. Meanwhile, contribution from Thar business (EPTL & SECMC) during 1QCY22 is expected to be PKR 1,744mn.

The profitability from Engro Power Thar Private Limited (EPTL) in 1QCY22 will be lower due to explosion at the power plant in the coal conveyor system of the 330MW Unit 1 of the plant, which drastically affected power generation during the month of Mar’22. In addition to the result, we expect the company to announce a final cash dividend of PKR 15.00/share in 1QCY22 (PKR 12.00/share in 1QCY21).

Courtesy – AHL Research