Engro Fertilizer to celebrate significant growth in profitability: Earning Preview

February 7, 2019 (MLN):  Engro Fertilizers Company Limited (EFERT) is scheduled to announce its financial results for the period ended December 2018 tomorrow and various brokerage houses have given their projections for the company’s net income.

Based on these forecasts, the general market expects EFERT to rejoice a rise in profits during both; the quarter and the whole year. The table below shows specific forecasts from these brokerage houses:

Brokerage house

Earning in 4QCY18

EPS

Earning in CY18E

EPS

Spectrum Research

Rs.4.995 billion (+18%, YoY)

Rs.3.74

Rs.17.244 billion (+55%, YoY)

Rs.12.91

Pearl Securities

Rs.5.821 billion (+31%, YoY

Rs.4.36

Rs.18.071 billion (+62%, YoY)

Rs.13.53

Ismail Iqbal securities

Rs.5.194 billion (+22.7%, YoY)

Rs.3.89

Rs.17.443 billion (+56.4%, YoY)

Rs.13.06

IGI Securities

Rs.4.795 billion (+14%, YoY)

Rs.3.59

Rs.17.044 billion (+53%, YoY)

Rs.12.77

AKD Securities Limited

Rs.5.057 billion (+19.5%, YoY)

Rs.3.79

Rs.17.306 billion (+55.1%, YoY)

Rs.12.96

The market attributes this overall rise in profitability to higher Urea and DAP offtakes (+11% and +12%, YoY in CY18) and higher pricing of both these products. These factors are expected to bring about significant growth in the company’s topline.

Mr. Mohammad Ahmed at Pearl Securities believes that EFERT will observe a mammoth growth of 54% YoY in CY18’s gross profits, “due to limited increase in cost on account of concessional feed gas, and lucrative fertilizer prices.”

However, subsidy on urea was reduced in 1HCY18 and discontinued in 3QCY18, whereas DAP subsidy was replaced with lower GST rate from 2HCY17 onwards. As the analyst at Peal Securities account for these factors, they deduce an expected plunge in non-core income.

Nonetheless, finance costs are expected to shrink due to debt repayments during the year.

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Posted on: 2019-02-07T12:30:00+05:00

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