February 17, 2022 (MLN): Engro Corporation Limited (ENGRO), one of Pakistan’s largest conglomerates with the company’s business portfolio in four verticals, which include food & agri, petrochemicals, energy & infrastructure and connectivity has reported a 19.3% YoY increase in its net profits to Rs52.6 billion (EPS: Rs48.5) for the calendar year 2021.
In CY20, the company had earned Rs44bn with EPS Rs43.57.
This increase in ENGRO’s profitability is primarily attributable to higher reported profitability by the Fertilizers and Petrochemicals businesses.
Along with the result, the company announced a final cash dividend for the year ended December 31, 2021, at Rs1 per share i.e., 10%.
On the fertilizer business front, EFERT’s net profit (the largest contributor to ENGRO’s earnings) witnessed an increase in its profitability by 16.32% YoY to clock in at Rs21 billion (EPS: Rs15.80) during CY21 on the back of a 12% increase in Urea offtakes and a 6% increase in its offtakes of overall product mix.
Furthermore, the bottom-line of Engro Polymer & Chemicals Limited (EPCL) settled at Rs15.1billion (EPS Rs16.28), depicting an increase of 2.6x YoY when compared to Rs5.73bn (EPS Rs6.3) in CY20, mainly on the back of higher PVC prices coupled with higher volumetric sales.
On the food business front, FrieslandCampina Engro Pakistan Limited (FCEPL)’s profits were also up by 10xYoY to Rs1.8bn in CY21 due to strong volumetric growth in all categories, improved gross margins and lower finance costs.
However, Engro Powergen Qadirpur Limited (EPQL) posted a profit after tax of Rs1.59 billion (EPS: Rs4.92) during CY21, depicting a decline of 23% YoY against the net profit of Rs2.08bn due to lower gross margins.
Overall, ENGRO recorded notable revenue growth of 25% YoY to Rs311bn in CY21, mainly on account of higher revenues from the fertilizer, chemical and other businesses. As a result, the gross margins of the company expanded from 31% to 32% in the said period.
The finance cost of the company declined by 15.6% YoY to Rs17.27bn as compared with Rs20.47bn in CY20 owing to lower short-term borrowing on the back of higher profitability and better working capital position of group companies.
Among other line items, other income decreased by 31% YoY to Rs12bn while the loss allowance on subsidy receivable from govt plunged by 55% YoY to Rs557mn.
The share of income from associates jumped to Rs3.23bn, up by 15.4% YoY.
However, the tax expenses which ballooned by more than two-fold to Rs18.66bn in CY21 restricted the company’s bottom line growth.
|
Consolidated Financial Results for the year ended December 31st 2021 (Rupees '000') |
|||
|---|---|---|---|
|
|
Dec-21 |
Dec-20 |
% Change |
|
Net Revenue |
311,587,401 |
248,817,815 |
25.23% |
|
Cost of revenue |
(212,132,676) |
(172,773,055) |
22.78% |
|
Gross Profit |
99,454,725 |
76,044,760 |
30.78% |
|
Distribution and selling expenses |
(7,819,291) |
(7,845,069) |
-0.33% |
|
Administrative expenses |
(7,658,843) |
(7,185,228) |
6.59% |
|
Other income |
12,222,050 |
17,737,785 |
-31.10% |
|
Other operating expenses |
(10,353,891) |
(6,415,695) |
61.38% |
|
Operating profit |
85,844,750 |
72,336,553 |
18.67% |
|
Finance cost |
(17,274,058) |
(20,472,792) |
-15.62% |
|
Loss allowance on subsidy receivable from GoP |
(557,700) |
(1,238,912) |
-54.98% |
|
Share of income from JV and associates |
3,226,697 |
2,796,374 |
15.39% |
|
Profit before taxation |
71,239,689 |
53,421,223 |
33.35% |
|
Taxation |
(18,657,213) |
(9,030,265) |
106.61% |
|
Profit from continuing operations |
52,582,476 |
44,390,958 |
18.45% |
|
Profit/(loss) from discontinued operations (attributable to owners of the holding company) |
29,283 |
(279,364) |
– |
|
Profit for the year |
52,611,759 |
44,111,594 |
19.27% |
|
Earnings/ (loss) per share – basic and diluted (Rupees) |
48.50 |
43.57 |
11.32% |
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