Engro Corporation Limited (ENGRO) announced its 2QCY22 financial result with a consolidated loss after tax of PKR 558mn (LPS: PKR 0.97) in contrast to PKR 8,717mn (EPS: PKR 15.13) in SPLY. On a cumulative basis, the consolidated earnings plummeted by 57% YoY, settling at 7,414mn (EPS: PKR 12.87). In addition to the result, the company announced a cash dividend of PKR 11.00/share in 2QCY22 (PKR 23.00/share in 1HCY22).

Result Highlights

· On the fertilizer business front, EFERT recorded a net loss of PKR 98mn (LPS: PKR 0.07) during 2QCY22 compared to a net profit of PKR 4,768mn in SPLY amid to i) imposition of super tax during the quarter, coupled with deferred tax liability adjustment, ii) hefty exchange loss on imports, and iii) drop in gross margin by 750bps YoY, settling at 30.51% since company is accruing industrial feed gas rate at EnVen plant as concessionary gas period has ended on 30th Jun’21.

· Profitability of Engro Polymer & Chemicals Limited (EPCL) clocked-in at PKR 2,338mn (EPS: PKR 2.45), down by 25% YoY in 2QCY22, which owed to i) imposition of super tax, ii) fall in gross margins by 141bps YoY due to lower PVC margins, and iii) massive exchange losses.

· Engro Powergen Qadirpur Pakistan Limited (EPQL) registered a Profit after Tax of PKR 255mn (EPS: PKR 0.79) in 2QCY22 compared to PKR 506mn (EPS: PKR 1.56) during SPLY, down by 50% YoY.

· The other expenses of ENGRO witnessed a massive jump of 95% YoY, arriving at PKR 3,059mn in 2QCY22 amid higher exchange loss tagged with increase in WPPF and WWF.

· The other income of ENGRO depicted a healthy growth of 73% YoY, which is attributable to increase in income from cash and cash balances.

· The company booked effective taxation at 88% in 2QCY22 vis-à-vis 17% in 2QCY21.The taxation includes super tax imposed during the quarter on the profit before tax of CY21 and 1HCY22.

Courtesy – AHL Research

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AHL Research