KARACHI: The Engro Fertilizers Limited (EFERT) on Monday reported a 30 percent fall in its first quarter net profit due to decline in urea sales and soft prices.
In a statement to the Pakistan Stock Exchange, the company reported a net profit of Rs2.12 billion for the quarter ended March 31, down from Rs3.05 billion in the same period of previous year.
Analysts said the result was still higher than market consensus estimates.
The company’s revenue declined 29 percent year-on-year to Rs12.6bn, owing to decline in urea sales and prices. “Both Urea and DAP offtake is expected to have declined while retention prices are also down year-on-year,” said analyst Muhammad Tahir Saeed at Topline Securities
The earnings per share (EPS) remained at Rs1.55 during the first quarter.
Saeed said gross margins of company slightly improved to 39 percent in the quarter versus 38 percent in the same quarter last year because of EnVen plant and its subsidized gas, which came online in March of last year. “However, if we exclude EnVen, EFERT’s margins likely compressed due to higher fuel and feedstock prices,” he added.
Analysts said company’s distribution cost declined 22 percent year-on-year to Rs856mn primarily due to lower sales. Financial charges also fell 40 percent to Rs753 million because of ‘balance sheet deleveraging by the company and lower interest rates.’
Other income in the quarter dropped 65 percent year-on-year. “This is likely due to decline in EFERT’s cash and short term investment because of repayment of GIDC (Gas Infrastructure Development Cess) backlog,” Saeed said.
On quarter-on-quarter basis, the company’s revenue posted decline of 65 percent, while gross margins, on the other hand, improved by 7ppt to 39 percent “due to change in sales mix as higher proportion of urea was sold during the quarter,” Saeed said.
Lucky Cement profits up 8 percent
Lucky Cement, the country’s leading cement manufacture, on Monday said its net profits up 8 percent to Rs11.80 in the first nine months of the current fiscal year.
For the period, earnings per share (EPS) were posted at Rs34.11 against Rs31.84.
The company said its net sales were recorded at Rs60.77 billion against Rs61.14 billion. But a decline in the cost of raw material supported the company’s posted gross profit of Rs20.38 billion against Rs18.65 billion. Cost of sales remained at Rs40.39 billion against Rs42.48 billion in the same period FY15.
The 6.1 percent decrease in the cost was mainly attributable to decrease in coal and other fuel prices as well as positive contribution of WHR plant in Pezu and Karachi.
For the quarter ended March 31, Luck’s profit fell 2.6 percent to Rs4.15 billion as compared to Rs4.26 billion in the same quarter FY15.
According to the company’s director’s report, cement industry in Pakistan grew by 9.9 percent to 28.35 million tons during the nine month period as compared to 25.78 million tons during the same period last year. Local sales grew by 17.7 percent to 23.94 million tons while export sales registered a decline of 19 percent to 4.41 million tons as against Rs5.44 million tons last year same period.
“Luck achieved an overall growth of 1.4 percent to 5.11 million tons during the nine-months compared to 5.03 million tons sold in the same period last year,” the report said. “Its local sales increased by 21.9 percent to 3.88 million tons while exports fell by 33.7 percent to 1.23 million tons.”
The report said the company is optimistic about its local volumetric growth in the current financial year on the back of private and public sector construction projects as well as mega infrastructure development projects under the China-Pakistan Economic Corridor (CPEC) initiative.
“Exports are expected to remain challenging due to lower commodity prices in the international market and devaluation of currencies against dollar in the prime export markets of the Lucky. However, it plans to increase local sales.”
Nestle profits down 6 percent
Nestle Pakistan Limited earnings declined by six percent in the financial results for the quarter ended March 31, 2016.
In its financial results report issued to the PSX, Nestle announced profits of Rs3.44 billion for the quarter as compared to Rs3.67 billion in the same quarter of the last year.
The company announced earnings per share (EPS) of Rs75.89 against Rs81.01.
Though net sales of the company were higher to Rs26.73 billion against Rs25.34 billion last year, an increase of 7.6 percent in the cost of sales to Rs17 billion as compared to Rs15.80 billion decreased the profit margins.
Thus, the gross profit was recorded at Rs9.72 billion against Rs9.53 billion in the same period of the last year.
Distribution and selling expenses of Nestle increased by 21 percent to Rs3.51 billion against Rs2.89 billion, which further reduced the profit margins.
Other income of the company was slightly low to Rs52.33 million as compared to Rs53.94 million.