EFERT lifts half-year dividend to Rs6.5 per share despite profit dip

July 30, 2025 (MLN): Engro Fertilizers Limited (PSX: EFERT) has declared a second interim cash dividend of Rs4.25 per share for the quarter ended June 30, 2025, translating to 42.5%.

This brings the total interim payout for the half year to Rs6.50 per share, inclusive of the earlier Rs2.25 per share declared in the first quarter.

The enhanced dividend indicates the company's commitment to delivering value to shareholders despite market headwinds.

For the six-month period, Engro Fertilizers reported a net profit after tax of Rs8.46 billion, down 11.37% from Rs9.43bn in the same period last year. The decline was largely attributed to softened non-core income and elevated finance costs, although the company maintained overall profitability.

Net sales dropped by 40.30% YoY, totaling Rs80.69bn compared to Rs113.2bn in H1 2024. The sharp contraction in revenue reflects subdued demand and pricing volatility in the fertilizer market.

However, cost of sales fell even more steeply by 62.35%, enabling Engro Fertilizers to post a 4.74% increase in gross profit, which stood at Rs26.53bn.

Operating profit reached Rs16.91bn, up 8.89% from the prior year, backed by disciplined cost control in selling and distribution expenses, which declined 5.52%.

Administrative expenses rose moderately by 3.95%, possibly due to inflationary pressures or strategic outlays.

Other income dropped significantly by 27%, signaling lower returns from ancillary operations. Other operating expenses also rose slightly, while finance costs surged over 51%, a reflection of rising borrowing rates or increased debt servicing.

The company recorded a gain of Rs192 million from subsidy receivables under the Government of Pakistan program, marking a 22% decrease from last year.

Earnings per share settled at Rs6.34, down from Rs7.06 in H1 2024.

The dip in EPS mirrors overall profitability trends and highlights the impact of higher operating and finance costs.

Despite these challenges, Engro Fertilizers has demonstrated resilience through effective cost management and maintained shareholder returns.

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