ENGRO's other income jumped 72% year over year during 2QCY24

Engro Corporation Limited (ENGRO) announced its 1HCY24 financial result with a consolidated profit after tax of PKR 6,261mn (EPS: PKR 11.67), a 42% decline YoY. On a quarterly basis, the consolidated earnings clocked in at PKR 2,243mn (EPS: PKR 4.18), plunging by 63% YoY. Alongside the result, the company announced a dividend of PKR 8.00/share in 2QCY24 (PKR 19.00/share in 1HCY24).

Result Highlights

On the fertilizer business front, EFERT’s bottom line in 2QCY24 clocked in at PKR 1,666mn (EPS: PKR 1.25) against PKR 1,060mn (EPS: PKR 0.79) in SPLY, up by 57% YoY given the hike in urea and DAP price by 59% and 15% YoY, respectively coupled with an increase in DAP offtake by 16% YoY.
Meanwhile, EPCL reported a loss of PKR 688mn (LPS: PKR 0.76) in 2QCY24 compared to a net profit of PKR 1,562mn (EPS: PKR 1.72) in SPLY. This was due to lower PVC margins, which were tagged with higher gas prices.
FCEPL posted earnings of PKR 588mn (EPS: PKR 0.77), up by 75% YoY on the back of an increase in gross margins by 281bps to 17.55% amid higher sales of dairy products.
ENGRO’s other income jumped 72% year over year during 2QCY24, which is attributable to a surge in income from cash and cash balances.
The company booked a reversal of the loss allowance on subsidy receivable from Govt. amounting to PKR 177mn in 2QCY24 against the loss allowance on subsidiary receivable from Govt. of PKR 72mn in 2QCY23.
The company booked effective taxation at 59% in 2QCY24 vis-à-vis 89% in 2QCY23.
In addition to the result, the company reiterated that the financial results of thermal energy (EPTL, EPQL, and SECMC) have been reported as discontinued operations given that these companies have met the classification criteria of IFRS-5 related to “Non-Current Assets Held for Sale and Discontinued Operation”.

Courtesy – AHL Research