Engro Holdings Limited, previously Dawood Hercules Corporation Limited (PSX: ENGROH), announced its financial results for the half year ended June 30, 2025.
Overview of Financial Performance
For the half year ended 30th June 2025, on a consolidated basis, the Company’s consolidated Profit-After-Tax (PAT) stood at PKR 73,318 million (PAT attributable to shareholders: PKR 35,575 million) with an EPS of PKR 29.54 in 2025 vs PKR 8.09 in 2024. The increase primarily arises from the reversal of previously recognized impairment during 2023 and 2024, linked to the thermal energy assets, which were previously classified as “held for sale”. Excluding this one-off impact, consolidated PAT stood at PKR 19,562 million (PAT attributable to shareholders: PKR 9,002 million).
On a standalone basis, the Company reported PAT of PKR 67 million against PKR 4,176 million in the same period last year, translating into an EPS of PKR 0.06 versus 8.68 in 2024. The decline is primarily due the transfer of income-generating investments to DH Partners under the Scheme of Arrangement that became effective on January 1, 2025, coupled with reduction in dividends from Engro Corp as it retains its earnings to fund the towers acquisition.
Major Accounting Adjustments
Three major adjustments shaped this period:
1. *Creation of Engro Holdings: Effective January 1, 2025, the Scheme of Arrangement made Engro Corporation a wholly owned subsidiary of Engro Holdings. As a result, profit attributable to owners now reflects 100% of Engro Corporation’s earnings compared with 39.97% in the same period last year. In addition, 723 million new shares were issued, increasing the Company’s outstanding shares from 481 million to 1,204 million. This expanded base impacts EPS comparisons.
2. *Thermal Energy Assets: Earlier, Engro Energy had signed agreements to divest its thermal assets. When those agreements were terminated in April 2025, the assets were reclassified back into continuing operations in accordance with IFRS 5. This resulted in the reversal of previously recognized impairment and other related adjustments amounting to PKR 53,756 million (Owners’ Share: PKR 26,573 million).
3. *Acquisition of Deodar Towers: On June 3, 2025, the Group consolidated Deodar (~10,600 towers) into its financial statements following completion of the transaction with PMCL. The assets and liabilities have been recognized at provisional fair values of PKR 220,612 million and PKR 167,679 million, respectively, and Deodar’s results for the 28 days to June 30 are included in this half year.
These adjustments, while fully in line with accounting standards, had a material impact on the reported results and complicate year-on-year comparability. For shareholders, it is essential to note that the reported EPS and PAT movements are primarily driven by structural changes and a one-time impairment reversal, rather than the underlying operating performance of the businesses.
Distribution to Shareholders
The Board has chosen not to declare an interim dividend for 2025. The immediate priority is to fund the remaining requirements of the tower acquisition. This is one of the most important investments in Engro’s history, with the potential to generate durable cash flows for years to come. Retaining earnings to support this investment is considered the most effective way to build long-term value for shareholders.
