Lower Urea and DAP offtake takes a toll on EFERT’s bottom-line earnings

By MG News | October 18, 2019 at 04:32 PM GMT+05:00

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October 18, 2019 (MLN): Engro Fertilizers Limited (EFERT), in its latest financial results, has posted net earnings of Rs. 10.5 billion (EPS: Rs. 7.87) for the nine months ended September 30, 2019, i.e. approx. 14% lower than the earnings reported in same period last year.

As per the analysis done by market spectators, the decline in profits was an inevitable outcome of drop in the Urea and Dap offtakes during the stated period.

On the brighter side, EFERT managed to report a positive change in gross profits despite its inability to pass on the impact of gas tariff hike onto the consumers during July and August.

The finance costs surged by 127% owing to hike in interest rates during the aforesaid period. On the other hand, non-core income increased by 95% on the back of higher interest income on short-term investments as well as one-off gain made on the sale of its subsidiary, Engro Eximp FZE.

The company also announced an Interim Cash Dividend for the quarter ended September 30, 2019 at Rs. 6 per share i.e. 60%. This is in addition to interim dividend already paid at Rs. 5 per share i.e. 50%.

Consolidated Financial Results for the nine months ended September 30, 2019 (Rupees'000)
	Sep-19	Sep-18	% Change
Net sales	77,749,136	69,215,104	12.33%
Cost of sales	-52,794,633	-45,319,338	16.49%
Gross profit	24,954,503	23,895,766	4.43%
Selling and distribution expenses	-5,449,526	-5,245,967	3.88%
Administrative expenses	-887,347	-762,972	16.30%
Other income	3,652,650	1,867,985	95.54%
Other operating expenses	-1,489,298	-1,074,448	38.61%
Finance cost	-3,228,796	-1,419,875	127.40%
Profit before taxation	17,552,186	17,260,489	1.69%
Taxation	-7,041,530	-5,011,401	40.51%
Profit for the period	10,510,656	12,249,088	-14.19%
Earnings per share - basic and diluted	7.87	9.17	-14.18%

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