Engro Corporation Q1 2018 results: Revenues up by 49%

Pakistan’s premier conglomerate, Engro Corporation (ENGRO) announced its financial results for the first quarter ended March 31st, 2018 at a meeting held at its headquarters in Karachi. The company posted a consolidated profit-after-tax (PAT) of PKR 6,837million compared to PKR 4,219 million up by 62%, while PAT attributable to the shareholders increased to PKR 4,194 million from PKR 2,841 million during comparative period last year.

Engro Corporation concluded the first quarter of 2018 with revenue of PKR 33,525 million vs. PKR 22,499million for the similar period last year depicting an increase of49% primarily driven by improved performances from its Fertilizers and Petrochemicals businesses.

On a standalone basis, the Company posted a PAT of PKR 3,146 million against PKR 5,300 million for similar period last year, translating into an EPS of PKR 6.01 per share (higher PAT in the previous period was on account of one-off super dividend from Engro Foods). The company announced an interim cash dividend of PKR 5 per share for the quarter.

Fertilizer business revenues grew by 81% whilst its PAT for the current quarter more than doubled as compared to comparative period – up by 138% – and stood at PKR 3,889 million. Higher profitability was led by increased urea sales volumes including exports as well as higher domestic prices on the back of reduced inventory levels.

The Engro Polymer & Chemicals business produced highest ever PVC during the quarter and recorded revenue growth of 28% over similar period last year. PAT for the current quarter was PKR 1,448 million against PKR 846 million for the comparative period. Primary drivers of profitability remained PVC domestic market growth, supportive PVC prices in the international market and improved Caustic margins.

Within Engro’s energy assets, the Qadirpur plant performed as per our expectations with a Net Electrical Output of 414GwH to the National Grid. EPQL’s receivables from power purchaser remained high due to circular debt. This is becoming a continuous challenge for the business and the power sector in general and needs urgent attention from the relevant authorities.

Thar Coal Mining Project progress remained ahead of plan with approx. 82 M BCM of overburden (represents 73% of total project) having been removed by the quarter-end.

Development on Thar Power Projects continued at a steady pace throughout the quarter. Engineering, Procurement and Construction progressis ahead of schedule and inspections of equipment at manufacturing facilities are progressing smoothly. The first electron from Thar Power will start generating power by the end of this year. The LNG terminal handled 18 cargoes as compared to 16 cargoes during similar period last year. Chemicals terminal witnessed a volumetric decrease due to lower importsof products during the quarter.

Engro Corporation will continue to explore investment opportunities across all sectors focusing on improving shareholder value by increasing and diversifying revenue and customer base, investment in new technology and efficiency enhancements.



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