Engro Holdings Limited results for the half year ended June 2025

August 28, 2025 (MLN): Engro Holdings Limited, previously Dawood Hercules Corporation Limited (PSX: ENGROH), informed its financial results for the half year ended June 30, 2025.

For the half year ended 30th June 2025, on a consolidated basis, the Company’s consolidated Profit-After-Tax (PAT) stood at PKR 73,318 million (PAT attributable to shareholders: Rs35,575m) with an EPS of Rs29.54 in 2025 vs Rs8.09 in 2024.

The increase primarily arises from reversal of previously recognized impairment during 2023 and 2024, linked to the thermal energy assets, which were previously classified as “held for sale”. Excluding this one-off impact, consolidated PAT stood at Rs19,562m (PAT attributable to shareholders: Rs9,002m).

On a standalone basis, the Company reported PAT of Rs67m against Rs4,176m in the same period last year, translating into an EPS of  Rs0.06 versus 8.68 in 2024.

The decline is primarily due the transfer of income-generating investments to DH Partners under the Scheme of Arrangement that became effective on January 1, 2025, coupled with reduction in dividends from Engro Corp as it retains its earnings to fund the towers acquisitio

Creation of Engro Holdings: Effective January 1, 2025, the Scheme of Arrangement made Engro Corporation a wholly owned subsidiary of Engro Holdings.

As a result, profit attributable to owners now reflects 100% of Engro Corporation’s earnings compared with 39.97% in the same period last year.

In addition, 723m new shares were issued, increasing the Company’s outstanding shares from 481m to 1,204m. This expanded base impacts EPS comparisons.

Thermal Energy Assets: Earlier, Engro Energy had signed agreements to divest its thermal assets.

When those agreements were terminated in April 2025, the assets were reclassified back into continuing operations under IFRS 5.

This resulted in the reversal of previously recognized impairment and other related adjustments amounting to Rs53,756m (Owners’ Share: Rs26,573m).

Acquisition of Deodar Towers: On June 3, 2025, the Group consolidated Deodar (~10,600 towers) into its financial statements following completion of the transaction with PMCL.

The assets and liabilities have been recognized at provisional fair values of Rs220,612m and Rs167,679 m respectively, and Deodar’s results for the 28-day period to June 30 are included in this half year.

These adjustments, while fully in line with accounting standards, had a material impact on the reported results and complicate year-on-year comparability.

For shareholders, it is important to note that the reported EPS and PAT movements stem from structural changes and a one-off impairment reversal, rather than the underlying operating performance of the businesses.

The Board has chosen not to declare an interim dividend for 2025. The immediate priority is to fund the remaining requirements of the towers acquisition.

This is one of the most important investments in Engro’s history, with the potential to generate durable cashflows for years to come.

Retaining earnings to support this investment is viewed as the best way to build long-term value for shareholders.

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