Engro Fertilizers net profit up seven percent in third quarter

KARACHI: Engro Fertilizers Limited’s (EFert) earnings went up seven percent with the help of its other income, which rose manifolds.

In its consolidated condensed interim profit and loss statement released to the Pakistan Stock Exchange on Tuesday, EFert announced profits of Rs2.92 billion, up against Rs2.73 billion during the same quarter of the last year.

The company also announced an interim cash dividend of Rs2.50/share, which is in addition to the already paid cash dividend of Rs2/share. The company’s earnings per share (EPS) rose to Rs2.15 against Rs2.05 last year.

Although sales increased 33 percent to Rs18.63 billion against Rs13.97 billion, a huge increase of 86 percent in the cost of sales to Rs13.71 billion against Rs7.35 billion, reduced the profits. It resulted in a decline in gross profits of Rs4.91 billion from Rs6.62 billion.

Selling and distribution expenses further increased to Rs1.64 billion against Rs967.61 million that trimmed the profits. However, manifold increase in other income to Rs2.32 billion against Rs174 million in the same period of the last year rescued the company and profit margins increased.

For the nine-months ended September 30, EFert announced a net profit of Rs5.74 billion, down against Rs9.59 billion during the same period of the last year. Syed Munib Imam, an analyst at Elixir Securities, said that variation from their estimates primarily emanated from higher-than-estimated cost of sales and higher-than-estimated distribution expense, which expanded 50 percent on year-on-year basis, owing to higher fertiliser offtake.