Engro Fertilizer announced highest ever quarterly profit of Rs9.6bn in 3Q2023

Engro Fertilizers (EFERT) announced its 3Q2023 financial result today, where the company recorded highest ever consolidated quarterly profit of Rs9.6bn (EPS: Rs7.17) up 129% YoY. It takes 9M2023 earnings to Rs15bn (EPS: Rs11.27) up 57% YoY.

Alongside result, EFERT announced interim cash dividend of Rs6.0/share, taking cumulative dividend in 9M2023 to Rs12.5/share.

3Q2023 result came higher-than-industry expectations due to higher than estimated net sales.

Net Sales of the company increased by 85% YoY to Rs66bn due to jump in Urea and DAP offtake by 54% YoY to 655k and 63% YoY to 84k tons, respectively. Additionally, higher retention price also played role in boosting net sales.

Gross Margins increased by 4.9ppts YoY to 31.7% in 3Q2023, which came in line with our expectations.

Selling and Distribution expenses increased by 56% YoY due to increase in volumetric sales of Urea and DAP.

Other Income increased by 260% YoY to Rs737mn in 3Q2023 due to higher interest income. However, we are awaiting detailed accounts for further clarity.

Despite higher interest rate, finance cost declined by 14% YoY and 29% QoQ possibly due to loan retirement, we believe.

Effective tax rate clocked in at 39% in 3Q2023 vs. 33% in 3Q2022 and 85% in 2Q2023.

Courtesy – Topline Pakistan Research 

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Posted in Fertilizer & Petrochemical Industries.

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