Engro Fertilizers Posts a 77% Increase in Profits During 9 Months of FY2018-19

Engro Fertilizers Limited (EFERT) has announced a comprehensive profit of Rs 12.24 billion for the nine months that ended September 2018, up by 77% as compared to Rs 6.92 billion in the same period last year.

The significant growth in its overall profits was a result of extraordinary topline earnings.

Overall, during the nine-month period, the sales of the company grew by 42.79% to Rs 69.25 billion as compared with Rs 48.47 billion in the previous year due to the higher selling prices of urea. The gross profits of the company showed a remarkable increase by 60.02% to Rs 23.89 billion as compared to Rs 14.93 billion.

Earnings per share (EPS) increased to Rs 9.17 compared to an EPS of Rs 5.19 last year and Rs 3.82 in Q32018. The results were above the market expectations.

An interim cash dividend at Rs. 4 per share (40%) was also recommended, in addition to an interim dividend of Rs. 4 per share that is already paid.

Finance cost during the period was down to 29.12% as compared to the previous year.

Furthermore, during the 3rd quarter, the company announced a remarkable profit of Rs 5.09 billion, up by 82% as compared with Rs 2.80 billion in the same period last year.

The Gross profit for the quarter was increased by 60.23% to Rs 9.87 billion as compared to Rs 6.16 billion last year.

According to Topline Securities, the company recorded this growth because last year, fertilizer manufacturers were offering discounts to offload their surplus inventory which has resulted in a gross profit margin in the urea segment of 47% during the Q32018 against 29% last year.

Other income of the company was down by 79% as the subsidy income fell down (After discontinuation in April 2018) significantly on urea amounting Rs100/bag.

EFERT’s script at the PSX closed at Rs 75.87, up by Rs 2.85 (3.90%) with a turnover of 9.64 million shares on Thursday.