February 17, 2020 (MLN): Engro Fertilizers Limited (EFERT) has reported a meagre fall of 3% YoY in its net annual profits to Rs 16.8 billion for the year ended December 31, 2019. In the previous year, the company posted net profits worth Rs 17.4 billion.
The small decline in the company’s earnings was attributable to two main factors, first one is a notable rise in finance cost by 87.69%, the second one is the increase in effective tax rate which was 36% in CY19 compared to 28% in CY18.
The top-line of the company witnessed a jump of 11% YoY owing to higher Urea and Dap prices which rose by 14% and 20% YoY respectively during the year. The gross margins of the company depicted a marginal increase from 32% to 33% due to a hike in prices which offset the surge in fuel and feed prices.
Moreover, amid higher interest earned on GIDC accumulation, the other income of the company increased by 111% YoY to Rs 4.35 billion mainly on account higher return on cash and short term investments. The other income also includes an on-off gain of Rs 678 million aroused on the sale of immovable property.
Alongside financial results, the Board of Directors of the company announced a final cash dividend of Rs2.0/share taking full-year payout to Rs13.0/share.
Consolidated Financial Results for the year ended December 31, 2019 (Rupees'000) | |||
|---|---|---|---|
| Dec-19 | Dec-18 | % Change |
Net sales | 121,354,758 | 109,196,586 | 11.13% |
Cost of sales | -81,814,870 | -73,880,139 | 10.74% |
Gross profit | 39,539,888 | 35,316,447 | 11.96% |
Selling and distribution expenses | -8,736,345 | -8,007,915 | 9.10% |
Administrative expenses | -1,248,191 | -1,485,002 | -15.95% |
Other income | 4,351,782 | 2,061,954 | 111.05% |
Other operating expenses | -2,622,661 | -1,532,350 | 71.15% |
Finance cost | -3,886,870 | -2,070,933 | 87.69% |
Profit before taxation | 27,397,603 | 24,282,201 | 12.83% |
Taxation | -10,526,380 | -6,868,683 | 53.25% |
Profit for the period | 16,871,223 | 17,413,518 | -3.11% |
Earnings per share – basic and diluted | 12.64 | 13.04 | -3.07% |
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