Engro Fertilizers Limited (EFERT) announced the financial result for 4QCY21 today, posting a consolidated Profit after Tax (PAT) of PKR 6,172mn (EPS: PKR 4.63) in contrast to PKR 6,643mn (EPS: PKR 4.97) in SPLY, down by 7% YoY. On a cumulative basis, consolidated net profit for CY21 clocked-in at PKR 21,093mn (EPS: PKR 15.80), up by 16% YoY (an all-time high earnings).

Alongside the result, the company announced a final cash dividend of PKR 5.00/share (PKR 16.50/share in CY21).

Result Highlights

· Net Sales in 4QCY21 settled at PKR 39,621mn, up by 43% YoY on account of surge in urea and DAP prices by 16% and 95% YoY, respectively tagged with 33% higher DAP offtake. Whereas, urea offtake declined by 3% YoY. Consequently, the topline during CY21 arrived at PKR 132,363mn, up by 25% YoY which is attributable to a 12% YoY jump in urea offtake coupled with a 5% and 67% YoY hike in urea and DAP prices, respectively.

· Gross margins clocked-in at 33.94% (down by 321bps YoY) in 4QCY21 as the company accrued industrial feed gas rate at the EnVen plant since concessionary gas period ended on 30th Jun’21. In CY21, gross margins arrived at 33.30% compared to 32.36% in CY20.

· Other income witnessed a fall of 45% YoY clocking-in at PKR 362mn in 4QCY21 owed to a decline in income from cash and cash balances. Meanwhile, other income in CY21 settled at PKR 1,790mn, up by 7% YoY.

· Finance cost plummeted by 29% YoY to PKR 337mn during 4QCY21 due to decline in borrowings. With this, finance cost in CY21 plummeted by 50% YoY due to the aforementioned reason.

· The company booked effective taxation at 25% in 4QCY21 vis-à-vis 8% in 4QCY20.

Courtesy- AHL Research