Engro Fertilisers profit declines 14pc to Rs10.51 bln in Jan-Sept 2019

KARACHI: Engro Fertilisers Limited profit declined 14 percent to Rs10.510 billion for the nine months period ended September 30, 2019, translating into earnings per share (EPS) of Rs7.87, a bourse filing said on Friday.

The company earned Rs12.249 billion with EPS of Rs9.17 in the nine month

period ended September 30, 2018, a notice to the Pakistan Stock Exchange (PSX) said.

The bank announced interim cash dividend for the quarter ended September 30, 2019 at Rs6/share which was equivalent to 60 percent. This was in addition to interim cash dividend already paid at Rs5/share which was equivalent to 50 percent, the notice said.

During Q3CY19, sales declined by 4.0 percent YoY to Rs27 billion mainly due to 11 percent YoY and 35 percent YoY decline in urea and DAP sales, respectively. However, higher urea (+16 percent YoY) and DAP (+7 percent YoY) prices partially offset the impact of lower volumes during the period.

Gross margin clocked-in at 33 percent during Q3CY19, depicting a decline of 253bps as compared to last year due to higher gas prices. The company did not raise urea prices during first two months of Q3CY19.

Other income depicted an increase of more than 400 percent YoY to Rs1,214 million in Q3CY19, which was likely on account of one-off gain on the sale of subsidiary (Engro Eximp FZE).

Financial charges jumped by 127 percent YoY to Rs1,210 million during Q3CY19 amid higher interest rates during the period.

Arif Habib Limited in their analysis said, “The company booked effective taxation at 44 percent during Q3CY19.”

Bank Alfalah profit up 10pc in nine months

Bank Alfalah profit increased 10 percent to Rs9.773 billion for the nine months period ended September 30, 2019, translating into EPS of Rs5.48, a PSX notice said.

The bank earned Rs8.912 billion with EPS of Rs4.98 in the nine month period ended September 30, 2018. The bank did not announce any interim cash dividend for the quarter ended September 30, 2019.

It posted earnings of Rs1.85/share, up by 23 percent YoY in Q3CY19 primarily due to net interest margins expansion owing to higher interest rates.

Cumulative earnings during 9M2019 of the bank clocked in at Rs9.7 billion (EPS: Rs5.48); up by 10 percent YoY.

Although non-interest income (NII) of the bank increased by 11 percent QoQ, earnings of the bank remained flat on quarterly basis primarily on the back of decline in NII by 16 percent QoQ and higher provisional expenses by Rs500 million. NII remained flat despite recording hefty gains in foreign exchange income of 33 percent primarily due to loss on securities of Rs373 million compared to gains of Rs185 million in the same period.

Non mark-up expense increased significantly by 26 percent YoY to Rs7.8 billion as compared to Rs6.2 billion in Q32018.

This was primarily on the back of higher operating expenses, which grew by 26 percent YoY to Rs7.5 billion.

The bank booked provision charge of Rs1.0 billion during the outgoing quarter versus reversal of Rs96 million during the similar period last year.

Analyst Sunny Kumar from Topline Securities marked some key risks for the bank, which included lower than expected advances and deposit growth, and deterioration in Pakistan macros.