EFERT sees an 8% growth in earnings despite lower sales during 2020

MG News | February 15, 2021 at 02:05 PM GMT+05:00

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February 15, 2021 (MLN): Engro Fertilizers Limited (EFERT) has earned Rs. 18.1 million (EPS: 13.58) during the year ended December 31, 2020, which is nearly 8% higher as compared to the earnings of the previous year.

The company also announced a final Cash Dividend of Rs. 4 per share i.e. 40%. This is in addition to the interim dividend already paid at Rs. 9 per share i.e. 90%.

The company reported a 13% decline in revenue, from Rs. 121.3 million last year to Rs. 105.8 million this year, owing to the lower volumetric sale of urea and DAP.

According to a report by AKD, the GIDC elimination in 1QCY20 resulted in a steep price decline of PkR400/bag on urea industry-wide. ‘Since EFERT does not record GIDC on concessionary gas, the cost of production did not witness a proportional decline, affecting the CY20 earnings negatively’, the report said.

Further strain was caused to the company’s financial position as loss allowance on subsidy receivable from govt amounting to Rs. 1.23 million was incurred during the year.

Nonetheless, the company got some relief from a 17% decline in finance costs owing to lower interest rates, as well as a 70% drop in income tax expense during the year.

Consolidated Financial Results for the year ended December 31, 2020 (Rupees)
	Dec-20	Dec-19	% Change
Net sales	105,846,314	121,354,758	-12.8%
Cost of sales	(71,591,626)	(81,814,870)	-12.5%
Gross profit	34,254,688	39,539,888	-13.4%
Selling and distribution expenses	(8,456,799)	(8,736,345)	-3.2%
Administrative expenses	(1,907,836)	(1,248,191)	52.8%
Other income	1,667,110	4,351,782	-61.7%
Other operating expenses	(1,904,878)	(2,622,661)	-27.4%
Finance cost	(3,236,285)	(3,888,870)	-16.8%
Other gains / (losses)	882,477
Profit before taxation	21,298,477	27,395,603	-22.3%
Taxation	(3,165,130)	(10,526,380)	-69.9%
Profit for the year	18,133,347	16,869,223	7.5%
Earnings per share	13.58	12.64	7.4%

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