Engro Corporation Limited (ENGRO) announced its 3QCY22 financial result with a consolidated profit after tax of PKR 8,017mn (EPS: PKR 13.91) compared to PKR 6,119mn (EPS: PKR 10.62) in SPLY, up by 31% YoY. On a cumulative basis, the consolidated earnings declined by 33% YoY, clocking-in at 15,431mn (EPS: PKR 26.78). Alongside the result, the company announced a cash dividend of PKR 10.00/share in 3QCY22 (PKR 33.00/share in 9MCY22).

Result Highlights

· On the fertilizer business front, EFERT net profit settled at PKR 4,182mn (EPS: PKR 3.13) during 3QCY22, down by 5% YoY owed to a reduction in urea and DAP offtake by 26% and 50% YoY, respectively due to flash floods across the country during the quarter.

· Profitability of Engro Polymer & Chemicals Limited (EPCL) clocked in at PKR 2,257mn (EPS: PKR 2.36), down by 27% YoY in 3QCY22, which is owed to i) lower volumetric sales amid monsoon season during the quarter, and ii) decline in PVC margins.

· Engro Powergen Qadirpur Pakistan Limited (EPQL) posted a Profit after Tax of PKR 971mn (EPS: PKR 3.00) in 3QCY22 compared to PKR 558mn (EPS: PKR 1.72) during SPLY, up by 74% YoY.

· Although we await disclosure, we believe that contribution from Thar business (EPTL & SECMC) and Elengy business during 3QCY22 stood at PKR 3,175mn and PKR 568mn, respectively.

· The other income of ENGRO showed a growth of 16% YoY, which is attributable to an increase in income from cash and cash balances.

· The finance cost showed a hefty surge of 98% YoY on account of higher interest rates and short term borrowings.

· The company booked effective taxation at 23% in 3QCY22 vis-à-vis 30% in 3QCY21. The taxation includes super tax imposed during the quarter on the profit before tax of 3QCY22

Courtesy -AHL Research