Engro Fertilizer's CY20 profit up 7.78pc

KARACHI: Engro Fertilizers Limited has announced a net profit of Rs18.133 billion for the year ended December 31, 2020, which is 7.78 percent higher than the profit of Rs16.87 billion recorded in the previous year ended December 31, 2019.

The earnings per share (EPS) for 2020 clocked in at Rs13.58 compared with the EPS of Rs12.64 in 2019. The company also declared a final cash dividend of Rs4.0/share, which is in addition to the interim dividend of Rs9.0/share already paid to the shareholders.

The earnings came in line with the market expectations. “Growth in earnings is attributed to lower feed and fuel gas cost amidst Gas Infrastructure Development Cess (GIDC) reduction. One time impact of GIDC re-measurement under IFRS-9 amounts to Rs2.121 billion,” an analyst at Taurus Securities said.

Company recorded sales revenues of Rs105.84 billion for the year under review, down 12.78 percent from Rs121.354 billion recorded in the previous year. Decline in revenues is owed to fall in urea and DAP off-take of 10 percent and 69 percent, respectively and 16 percent dip in urea prices. “Meanwhile, DAP prices rose up by 7.0 percent.

With this, net sales plummeted on the back of a drop in urea and DAP prices, tagged with 28 percent reduction in DAP off-take,” a report issued by Arif Habib Limited noted. Other income in 2020 settled at Rs1.66 billion, down 62 percent from Rs4.35 billion in 2019, given absence of gain on property, plant and equipment and reversal of liability for workers’ welfare fund. Finance costs for the year declined 17 percent to Rs3.236 billion compared with Rs3.88 billion in 2019 due to lower interest rates during the period.