ENGROH senior management held an analyst briefing today to discuss CY25 financial performance and the outlook.
Brief Takeaways:
Engro Holdings reported consolidated revenue of approximately PKR 350bn in CY25, up from PKR 312bn last year, mainly driven by portfolio changes, including the Deodar transaction. Management indicated a blended average tariff of around 1.27 for the LNG business and remains engaged with stakeholders to achieve a longer-term tariff framework.
In the fertiliser segment, earnings declined 8% YoY to PKR 23bn despite a 14% YoY increase in urea offtake to 2.3mn tons. Profitability was impacted by higher gas prices and a one-off super tax provision booked in 4QCY25. Gas allocation arrangements have now been formalised under a revised framework.
The polymer business faced a challenging year due to weak demand and pressure on core spreads, resulting in a loss of approximately PKR 3.9bn compared to a profit last year. Management indicated that recovery remains dependent on demand improvement and margin normalisation.
The power segment maintained plant availability of over 97% during the year; however, earnings remained under pressure due to tariff adjustments.
The LNG terminal business saw a decline in profitability due to lower dispatch volumes and margin compression. Engro Eximp FZE posted a 19% YoY increase in revenue to USD 612mn, supported by stronger trading activity. Engro Eximp operates with a diversified revenue and profitability base spanning Pakistan and the Middle East. Management views this segment as a key growth vertical and expects annual growth of 10–15%, driven by geographic expansion, product diversification, and customer base expansion.
The dairy segment recorded a 2% YoY decline in topline amid weakness in the packaged milk category, while profitability improved 22% YoY due to improved product mix and cost efficiencies.
Management indicated that the cost of constructing a new tower is approximately USD 10mn, while additional solarisation requires around USD 2.5mn. Energy costs vary by tower, depending on grid reliability and connectivity; however, these costs are largely passed on to customers.
The Deodar and Enfrashare verticals have contributed approximately PKR 8–9bn in profitability, excluding accounting adjustments, reflecting their meaningful contribution to the group’s earnings profile.
The cumulative super tax cash outflow stands at approximately PKR 14bn. Management expects partial recoveries, which could lower the net financial impact over time.
Courtesy – AHL Research
