EFERT: Lower finance cost, higher Other income lift profitability
MG News | October 13, 2021 at 05:05 PM GMT+05:00
October 13, 2021 (MLN): Engro Fertilizers Limited (PSX: EFERT), has disclosed its financial performance today for 9MCY21, wherein the fertilizer giant reported a 30% YoY increase in after-tax profits to Rs14.9bn (EPS: Rs11.17/sh) compared to Rs11.49bn (Rs8.61/sh) in the corresponding period last year.
Results were accompanied with an interim cash dividend of Rs11.5/share.
The jump in the company’s earnings was emanated from 12%YoY higher offtake in Urea, 54%YoY contraction in finance cost in light of the low-interest rate environment and 42% YoY increase in Other income on account of higher dividend income from EAPL in the 1QCY21, higher interest income from government securities, term deposit certificates and bank deposits.
The top-line of the company registered a growth of 18.69% YoY, mainly on the back of record high rise in Urea Prices currently stands at Rs1,812/bag as a result of which gross profits of the company grew by 28% YoY to Rs31bn. Subsequently, the margins of the company jumped to 33% from 31% during 9MCY20, despite the discontinuation of concessionary gas prices.
Selling and distribution expenses remained stagnant while admin expenses inched up by 10% YoY. On the taxation front, the company’s effective tax rate stood at 31% against 19% in SPLY.
In addition, the company also booked a loss on the re-measurement of GIDC provision amounting to Rs786mn.
|
Consolidated Financial Results for the Nine months ended Sep 30, 2021 (Rupees'000) |
|||
|---|---|---|---|
|
|
Sep-21 |
Sep-20 |
% Change |
|
Net sales |
92,742,114 |
78,138,036 |
18.69% |
|
Cost of sales |
(61,718,437) |
(53,900,431) |
14.50% |
|
Gross profit |
31,023,677 |
24,237,605 |
28.00% |
|
Selling and distribution expenses |
(5,996,344) |
(5,990,180) |
0.10% |
|
Administrative expenses |
(1,359,623) |
(1,234,810) |
10.11% |
|
Other income |
1,428,778 |
1,005,870 |
42.04% |
|
Other operating expenses |
(1,685,296) |
(1,148,896) |
46.69% |
|
Finance cost |
(1,265,572) |
(2,762,935) |
-54.19% |
|
Loss on remeasurement of GIDC provision |
(786,114) |
- |
|
|
Reversal of ECL on subsidy receivable from GoP |
272,710 |
- |
|
|
Profit before taxation |
21,632,216 |
14,106,654 |
53.35% |
|
Taxation |
(6,711,462) |
(2,615,972) |
156.56% |
|
Profit for the period |
14,920,754 |
11,490,682 |
29.85% |
|
Earnings per share - basic and diluted |
11.17 |
8.61 |
29.73% |
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