Engro Corporation Limited (ENGRO) announced its result for 1QCY20 wherein the company reported a profit after tax of PKR5.9bn (EPS: PKR 5.76) compared to PKR8.4bn (EPS: PKR 6.09) in the previous quarter, translating into a decline of 5% on QoQ basis. The result was slightly above our expectations.

The company also announced a cash dividend of PKR 6/sh exceeding our expectations.

Main deviation came from lower effective tax rate of 16% compared to 33% in the previous quarter and 31% in the same period last year.

Net revenue clocked in at PKR 44,977mn depicting a 41% decline on QoQ basis from PKR 76,519mn in the previous quarter, however, same posted an increase of 11% on YoY basis. Sharp decline in topline on QoQ basis was mainly attributable to 75% and 29% decline in revenues from EFERT and EPCL respectively.

On sequential basis, profitability during the quarter declined by 29% due to lower earnings reported by subsidiaries. Among the listed subsidiaries profitability reduced by 91%, 78% and 10% for EFERT. (BMA Capital Management Ltd.)