Engro Corporation FY 2022 Results

Pakistan’s premier conglomerate, Engro Corporation Limited (PSX: ENGRO) announced its financial results for the year ended December 31, 2022.

Overview of Financial Performance during 2022

Engro Corporation’s standalone revenue increased from PKR 21 billion in 2021 to PKR 24 billion in 2022, exhibiting healthy growth of 14%. Higher revenue was primarily due to higher dividends received from Engro Polymer & Chemicals Limited (EPCL), Engro Fertilizers Limited (EFERT) and Engro Energy Limited (EEL) which, in turn, were driven by strong underlying business performance. Resultantly, the Company achieved an 11% higher PAT of PKR 21 billion in 2022 against PKR 19 billion in 2021, translating into an EPS of PKR 36.79 per share (2021: PKR 32.14 per share).

On a consolidated basis, Engro Corporation’s revenue grew by 14% to PKR 356 billion in 2022 from PKR 312 billion in 2021. The Company posted a PAT of PKR 46 billion in 2022, which is 13% lower than PKR 53 billion in 2021 on aa ccount of Super Tax charge of 4% on retrospective and current year earnings and one-off adjustment of Engro Powergen Thar Limited (EPTL) tariff true up adjustment. The PAT attributable to the shareholders decreased to PKR 24 billion from PKR 28 billion in 2022, translating to an EPS of PKR 42.23 per share (2021: PKR 48.50 per share).

With reference to Super Tax imposition of 4% on retrospective year earnings and additional discriminatory Super Tax of 6% on selected sectors, the Group appealed before Sindh High Court (SHC) and the matter was decided in favor of the Group. Whilst having the support of our legal and tax advisors, the Group decided to maintain provision to the extent of 4% Super Tax.

Engro Corporation announced a final cash dividend of PKR 1/- per share for the year. This is in addition to the PKR 33/- per share dividend announced during the year, bringing the cumulative payout to PKR 34/- per share.

Portfolio Performance Review

Fertilizers: Domestic market witnessed adverse implications of global economic downturn and recent severe flooding in the Country. Urea sales decreased to 1,936 KT compared with 2,295 KT in 2021, due to a 60-day LTR (Long Term Turnaround), which was the longest LTR in the last 50 years. This was achieved with a “ZERO” TRIR (Total Recordable Injury Rate) and no unplanned outages. Following the completion of this successful LTR, performance of the facility is expected to improve with a reduction in the energy index and capacity enhancement by ~ 170KT per annum.

International DAP prices decreased to USD 730/T on the back of slowdown in global demand and commodity cycle reversal. Due to unprecedented floods, the domestic phosphate market (DAP / NP / Zorawar) witnessed a drastic fall in demand, resulting in sales declining to 333 KT in 2022 from 366 KT in 2021.

The business enabled import substitution to the tune of USD 1.3 billion during the year. On an overall basis, the profitability of Engro Fertilizers Limited decreased by 24% to PKR 16 billion in 2022 against PKR 21 billion in 2021, impacted by levy of Super Tax.

Petrochemicals: International PVC supply remained disrupted due to resurgence of Covid-19 in China. Local supplies to domestic PVC downstream market continued uninterrupted due to steady production at Engro Polymer & Chemicals Limited. Business continued its upward momentum in PVC segment with the highest ever domestic sale of 231 KT against 207 KT in 2021. After catering to local PVC demand, the business also recorded export sales of 26 KT, including caustic exports of 15 KT, translating to an export value of USD 21 million. The business also enabled import substitution to the tune of USD 134 million.

EPCL recorded sales of PKR 82 billion in 2022 versus PKR 70 billion in 2021. PAT for the year declined to PKR 12 billion from PKR 15 billion in 2021, primarily due to the imposition of Super Tax and commodity cycle reversal.

Telecommunication Infrastructure: Engro Enfrashare (Pvt) Limited continued to expand its national footprint and achieved a scale of 3,329 tower sites with a 1.17x tenancy ratio during 2022 versus 2,246 tower sites with 1.1x tenancy ratio in 2021, catering to all four major Mobile Network Operators (MNOs) of Pakistan. The business captured a market share of 62% in Build-to-Suit (B2S) towers compared to other independent tower companies, leading to 2x revenue versus last year.

Growth potential in the business is further demonstrated by the co-location activities witnessed during the year, with total co-location tenants of 560 versus 235 in 2021, representing a 2.4x increase.

Foods & Rice: FrieslandCampina Engro Pakistan Limited witnessed robust growth momentum on the back of strong volumetric sales in both Dairy and Ice Cream segments. Business demonstrated a top line growth of 40%, recording sales of PKR 73 billion as compared to PKR 52 billion in 2021. The business recorded a PAT growth of 39% from PKR 1.8 billion in 2021 to PKR 2.5 billion in 2022 due to volumetric growth driven by distribution network expansion and surge in demand post floods.

Engro Eximp Agriproducts (Pvt) Limited continued its focus towards exports as a key contributor in foreign reserves of the Country. The business generated a revenue of USD 31 million through international sale of 36 KT of rice against 24 KT last year. Supply to the local market decreased by 8% to 12 KT during 2022 versus 13KT last year.

Energy & Power: Mining operations continued smoothly during the year with supplying coal to Engro Powergen Thar Limited, Thar Energy and Lucky Electric Power Company. The mine’s Phase II expansion was achieved during the year, which doubled capacity to 7.6 million tons per year, effective October 1, 2022. Government of Sindh has also approved Phase III capacity enhancement to 11.4 million tons per year. The business enabled import substitution to the tune of USD 320 million during the year. 

EPTL dispatched 3,679 GWH to the national grid compared to 4,225 GWH last year and achieved 73% availability as compared to 83% last year. Plant availability remained low in the first quarter but, after detailed inspection and necessary rehabilitation work, both units of the plant successfully came fully back online.

Engro Powergen Qadirpur Limited dispatched a Net Electrical Output of 768 GwH to the national grid with a load factor of 41%. Scheduled maintenance outage was undertaken for a major overhaul, conducted every sixth year. The business posted a PAT of PKR 1.5 billion in 2022 as compared to PKR 1.6 billion for 2021.


Engro Elengy Terminal (Pvt) Limited handled 74 vessels during 2022 versus 72 vessels in 2021, delivering 219 bcf re-gasified LNG into the SSGC network with an availability factor of 97.6%. The Terminal contributed 15% towards Pakistan’s total gas supply during the year.

Engro Vopak Terminal Limited recorded the highest ever volumetric increase in chemical handling to 1,331 KT in 2022 against 1,280 KT last year, attributable to higher imports of phosphoric acid and paraxylene which was offset by lower LPG marine imports of 32% over last year, primarily driven by gray channel imports.


Sharing is caring

Leave a Reply