April 19, 2021 (MLN): Engro Fertilizers Company Limited (EFERT) has announced its financial results for the 3QFY21, wherein the company reported a whopping 10x increase in net profits to Rs5.74 billion compared to the profits of Rs570.7 million in the corresponding quarter last year.
The earnings per share of the company clocked in at Rs4.3/sh compared to Rs0.43/sh in 3Q of FY20.
Alongside financial results, the company also announced an interim Cash Dividend for the quarter mentioned above at Rs. 4.00per share i.e. 40%.
This remarkable increase in profitability was attributable to higher Urea and DAP offtake which surged by 262% and 84% YoY during the quarter due to large carryforward inventory of Urea and dealers move to build-up inventory in DAP market. To highlight, barring impact of Rs400/bag GIDC reduction, UREA prices increased by around 16% YoY in 3QFY21, the report by Foundation Securities cited.
The net Sales during the quarter ascended by 2.7x YoY, clocking in at Rs29,444mn. The gross margins stood at 39.25% in compared to 33.68% in 3QFY20, given significant jump in urea offtake.
The finance cost of the company declined by 78%YoY mainly due to lower interest rate and working capital needs of the company. EFERT also booked reversal of Rs297mn GIDC re-measurement gain booked earlier.
Furthermore, among other major heads, selling and distribution expenses increased by 73% YoY due to higher offtake.
The company also booked unwinding of loss allowance on subsidy receivable from GoP of Rs100.7mn recorded last quarter, which further strengthened EFERT’s earnings.
The company booked effective taxation at 34% in 3QFY21vis-à-vis 49% in 3QFY20.
|
Consolidated Financial Results for the third quarter ended March 31, 2021 (Rupees'000) |
|||
|---|---|---|---|
|
|
Mar-21 |
Mar-20 |
% Change |
|
Net sales |
29,443,723 |
10,791,539 |
172.84% |
|
Cost of sales |
(17,885,979) |
(7,156,467) |
149.93% |
|
Gross profit |
11,557,744 |
3,635,072 |
217.95% |
|
Selling and distribution expenses |
(1,827,495) |
(1,056,192) |
73.03% |
|
Administrative expenses |
(411,516) |
(358,337) |
14.84% |
|
Other income |
479,069 |
261,213 |
83.40% |
|
Other operating expenses |
(672,245) |
(148,228) |
353.52% |
|
Finance cost |
(269,092) |
(1,211,917) |
-77.80% |
|
Unwinding of remeasurement gain on provision for GIDC |
(297,056) |
– |
|
|
Unwinding of loss allowance on subsidy receivable from GoP |
100,784 |
– |
|
|
Profit before taxation |
8,660,193 |
1,121,611 |
672.12% |
|
Taxation |
(2,918,766) |
(550,847) |
429.87% |
|
Profit for the period |
5,741,427 |
570,764 |
905.92% |
|
Earnings per share – basic and diluted |
4.3 |
0.43 |
900.00% |
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