Engro Fertilizers’ profit jumps over threefold in 2Q2025

KARACHI: Engro Fertilizers (EFERT) posted a consolidated profit of Rs5.6 billion for the second quarter of 2025, translating into earnings per share (EPS) of Rs4.17, up 234 per cent year-on-year (YoY) and 92 per cent quarter-on-quarter (QoQ).

According to Topline Securities, the result was broadly in line with industry expectations.This brings the company’s first-half 2025 earnings to Rs8.5 billion (EPS: Rs6.34), reflecting a 10 per cent decline compared to the same period last year.

EFERT declared a second interim cash dividend of Rs4.25 per share, bringing the total payout for the first half of 2025 to Rs6.5 per share -- representing a payout ratio of 103 per cent, in line with expectations.

Net sales during the quarter rose by 28 per cent YoY and 66 per cent QoQ to Rs50 billion, driven by increased offtake and higher prices of urea and DAP. However, gross margins came in at 31 per cent, below the expected 35.5 per cent, and down from 35 per cent in the previous quarter.

Distribution expenses rose by 31 per cent YoY and 5 per cent quarter-on-quarter to Rs3.39 billion, due to increased sales volume. Other income stood at Rs1.3 billion, higher than anticipated, mainly due to the sale of an old aircraft, according to channel checks.

Finance costs increased by 44 per cent YoY and 62 per cent QoQ to Rs1.8 billion in 2Q2025, taking the first-half total to Rs2.9 billion -- more than double the corresponding period last year.

Tax expense for the quarter was Rs3.66 billion, reflecting an effective tax rate of 40 per cent, compared to Rs893 million (effective tax rate of 35 per cent) in 2Q2024. The effective tax rate for the first half stands at 40 per cent.