EFERT: Lower finance cost, higher Other income lift profitability

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%

Copyright Mettis Link News

Posted on: 2021-10-13T17:05:53+05:00

27427