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EFERT posts 2.35x increase in net profits

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July 29, 2021 (MLN): Engro Fertilizer Limited (EFERT) has posted a 2.35x increase in net profits to Rs10.5bn (EPS: Rs7.87) for the half-year ended on June 30, 2021, as against the net profits of Rs4.45bn (EPS: Rs3.34) in the corresponding period last year.

Alongside financial results, the company announced an interim dividend of Rs4/share for the period mentioned above.

The increase in the company’s profitability is mainly attributable to better Urea retention prices, increased profitability from fertilizer trading business, a decline in finance cost, and higher other income due to the strong cash position of the company given advances from customers for DAP fertilizer, a report by Foundation Securities highlighted.

Given higher urea prices, the gross margins of the company jumped from 34% to 39%. The top-line of the company surged by 36% YoY while its cost of sales inflated by 27.26% YoY.

On the cost front, the company’s Admin and selling expenses surged by 25.8% and 12.7% YoY respectively while its operating expenses dipped by 17.9% YoY.

Although the company witnessed a sharp 95% YoY increase in tax expenses, the lower effective tax of 31% against 35% in the previous year supported the bottom line.

Moreover, EFERT also booked a loss of Rs516.27mn on re-measurement of GIDC provision and gained Rs164.2mn on reversal of expected credit loss on subsidy receivable from Gov’t.

Consolidated Financial Results for the half-year ended June 30, 2021 (Rupees'000)

 

Jun-21

Jun-20

% Change

Net sales

                        55,359,257

                        40,702,810

36.01%

Cost of sales

                      (33,950,880)

                      (26,678,068)

27.26%

Gross profit

                        21,408,377

                        14,024,742

52.65%

Selling and distribution expenses

                        (3,863,726)

                        (3,427,557)

12.73%

Administrative expenses

                           (906,247)

                           (720,134)

25.84%

Other income

                             970,644

                             504,717

92.31%

Other operating expenses

                        (1,124,234)

                        (1,370,595)

-17.97%

Finance cost

                           (839,546)

                        (2,107,721)

-60.17%

Loss on remeasurement of GIDC provision

                           (516,276)

 –

 

Reversal of ECL on subsidy receivable from GoP

                             164,417

 –

 

Profit before taxation

                        15,293,409

                          6,903,452

121.53%

Taxation

                        (4,784,282)

                        (2,446,612)

95.55%

Profit for the period

                        10,509,127

                          4,456,840

135.80%

Earnings per share – basic and diluted

7.87

3.34

135.63%

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Posted on: 2021-07-29T17:04:00+05:00

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