KARACHI: Engro Corporation’s profit rose 12% to Rs4.92 billion in the quarter ended September 2017 mainly due to reduced costs in several heads after Engro Foods became an associated company.
The conglomerate had recorded a profit of Rs4.41 billion in the same quarter of previous year.
Earnings per share improved to Rs5.99 in Jul-Sep 2017 from Rs5.85 in the corresponding period of last year.
Engro announced an interim cash dividend of Rs7 per share, which was in addition to the already paid dividend of Rs12 per share. The new entitlement will be paid to the shareholders whose names will appear in the register of members on December 22, 2017.
Engro Corp’s share price inched up 0.05%, or Rs0.14, to Rs294.64 with a volume of 857,800 shares at the Pakistan Stock Exchange.
Cost of sales dropped 23% to Rs24.91 billion from Rs32.19 billion. Selling and distribution expenses fell 35% to Rs1.83 billion from Rs2.79 billion.
Finance cost came down by 27% to Rs1.04 billion from Rs1.43 billion. Share of income from joint ventures and associates improved to Rs445.81 million from Rs364.59 million.
Net sales of the group of companies dipped 17% to Rs34.18 billion in the Jul-Sep 2017 quarter from Rs41.06 billion in the corresponding period of previous year.
In a statement, Engro Corp said “Engro Foods became an associated company with effect from December 19, 2016. Accordingly, its revenues are not consolidated for the period Jan-Sep 2017 whereas the comparative period includes such revenues.
“Similarly, profit after taxation (PAT) for Jan-Sep 2017 includes shares of profit of Engro Foods under the equity method of accounting, whereas the comparative period PAT includes Engro Foods’ profit of Rs2.59 billion,” it said.
Topline Securities said Engro Fertilizers’ revenue contribution stood at Rs21.2 billion, Engro Polymer and Chemicals Limited at Rs7.3 billion, Engro Powergen Qadirpur Limited at Rs2.6 billion while the remaining was from unlisted subsidiaries.
Other income decreased 28% to Rs2.01 billion from Rs2.81 billion. This came due to a “lower fertiliser subsidy”, the brokerage house said.
Cumulatively in nine months, Engro Corp’s profit improved 3% to Rs11.64 billion from Rs11.32 billion in the corresponding period.
The nominal profit rise was the result of a higher effective tax rate of 42% as compared to 32% last year, which was attributable to the imposition of super tax retrospectively on the income of 2016.
“We highlight fertiliser inventory buildup/weak demand dynamics, pressure on international urea prices and volatility in polymer margins as key risks for the holding company,” the brokerage house said.
Published in The Express Tribune, October 27th, 2017.
Source: Tribune News | Engro Corp’s profit rises 12% to Rs4.92 billion