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WEEKLY
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| Engro profit falls, announces dividend |
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Wednesday, July 29, 2009
By our correspondent
KARACHI: Engro Chemicals (Engro) has announced a net profit at Rs1 billion for the first half of the year ended on June 30.
This is 33 per cent lower than Rs1.6 billion profits recorded in the same period in 2008. Therefore, the company managed to announced first interim cash dividend of 20 per cent or Rs2 per share, said in the KSE notification. Accordingly, the Earning Per Share (EPS) translated into Rs3.50 against Rs5.22 last year. “The decrease in earnings was largely on account of higher financial charges & squeezing gross margins,” said Farhan Rizvi at JS Research.
The company recorded revenues of Rs10.7 billion in under review period, which is up by 21 per cent on yearly basis. This growth is largely led by a combination of a sharp rise in urea prices & higher DAP off-take, he added. Average urea prices were recorded at Rs685/bag nearly 27 per cent higher than those in the same half last year. Moreover, lower DAP prices allowed a higher off-take of 72,000 tons versus 25,000 tons in first half of calendar year 2008.
Despite strong growth in the top line, increased cost pressures kept gross profits subdued as they fell by 13 per cent to Rs2.9 billion. A 43 per cent jump in cost of good sold to Rs7.8 billion propelled gross margins to 28 per cent down a massive 1081bps.
Moreover, higher financial charges up a massive 60 per cent to Rs905 million exerted further pressure on the bottom line.
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ISSN 1563-9479 
