Engro Corp profit increases to Rs4.917bln

KARACHI: Engro Corporation Limited’s profit increased to Rs4.917 billion for the quarter ended June 30, 2019 from Rs4.217 billion in the corresponding quarter a year earlier. The profit translated into earnings per share (EPS) of Rs4.97 compared with Rs3.29.

The company announced interim cash dividend for the quarter ended June 30, 2019 at Rs8/share, which is equivalent to 80 percent. This was in addition to Interim dividend, which is already paid at Rs7/share, which is equivalent to 70 percent.

On the fertilizer business front, EFERT posted a meager decline of 3 percent year-on-year in profitability to Rs3177 million during 2QCY19 amid 8 percent and 13 percent year-on-year lower urea and DAP offtake, respectively.

Profitability of Engro Polymer and Chemicals Limited clocked in at Rs447 million, down by 66 percent year-on-year, given change in accounting treatment (IFRS 16) and exchange losses arising from the said implementation.

FrieslandCampina Engro Pakistan Limited posted a loss after tax of Rs322 million (loss per share: Re0.42) in 2QCY19 as compared to profit after tax of Rs210 million (EPS: Re0.27) during the same period last year owing to decline in gross margins (15 percent in 2QCY19 versus 19 percent in 2QCY18).

Share of profit from joint venture was also below expectation and it was on account of change in taxation regime to corporate tax as compared to turnover tax previously.

Arif Habib Limited in its analysis said the company booked effective taxation at 50 percent during 2QCY19 as the company booked tax charge on account of deferred tax liability amid freezing of corporate tax rate at 29 percent which was previously reduced to 25 percent by gradual reduction of 1 percent on annual basis.

Sunny Kumar from Topline Securities said some key risks to Engro included poor crop season, scarcity of water for sowing season, volatility in polymer margins and change in regulatory structure in energy division as key risks for the holding company.

Allied Bank’s profit down 14pc for the half year

Allied Bank Limited’s (ABL) profit fell 14 percent to Rs6.242 billion for the half year ended June 30, 2019, translating into EPS of Rs5.45, a bourse filing said on Tuesday.

ABL earned Rs7.245 billion with EPS of Rs6.33 in the corresponding half a year earlier.

The bank announced interim cash dividend for the half year ended June 30, 2019 at Rs2/share, which is equivalent to 20 percent. This is in addition to interim dividend, already paid at Rs2/share, which is equivalent to 20 percent.

Net interest income of the bank settled at Rs18.7 billion for 1HCY19, increasing 18 percent year-on-year.

However NII declined 5 percent QoQ with interest expense going up 25 percent against increase of 14 percent in mark-up income.

Nominal capital gains during the year remained the primary reason behind a 17 percent year-on-year fall in NFI.

Dividend income also declined 32 percent YoY as payouts of listed companies faced constraints, albeit FX income provided support, increasing 86 percent YoY.

Recovery pipeline for the bank has continued with net reversals settling at Rs85 million during 2Q (down 58 percent QoQ). A staggering decline has been witnessed on a yearly basis with net reversals contracting 71 percent YoY.

OPEX for the bank has witnessed a jump of 17 percent YoY / 18 percent QoQ with cost/income accelerating to 54 percent compared to 49 percent during 1HCY18.

Arif Habib Limited in its analysis said effective tax rate was set at 45 percent during 1HCY19 compared to 39 percent SPLY, owing to additional super tax charge booked during the first quarter (on CY17 profits).