The management of Engro Fertilizer Limited (EFERT) is expected to announce financial results for CY23 on 15th Feb’24, where we expect the net profit to arrive at PKR 24,782mn (EPS: PKR 18.56), swelling up by 55% YoY. The bottom-line surge comes from 20% and 6% YoY growth in urea and DAP offtake along with a jump in urea prices. On a quarterly basis, the profitability is expected to settle at PKR 15,963mn (EPS: PKR 7.29), depicting a hefty jump of 3x YoY, which is mainly attributable to a massive surge in urea and DAP sales of 45% and 15% YoY, respectively followed by a hike in urea prices. Gross margins are forecasted to settle at 28.15% in 4QCY23 vis-à-vis 22.85% in SPLY, owing to higher sales volumes of urea.

Furthermore, finance costs are estimated to decline by 47% YoY due to a decrease in short-term borrowings. Other income is anticipated to climb up by 50% YoY, owed to higher income from cash and cash balances. Alongside the result, we expect the company to announce a cash dividend of PKR 7.00/share (PKR 19.50/share in CY23. Courtesy – AHL Research