Karachi, July 29, 2021 (PPI-OT): Engro Fertilizer Limited: Higher urea and DAP prices lift 2QCY21 EPS to PKR 3.60, Cash dividend PKR 4.00/Share

EFERT announced its financial result for 2QCY21, reporting a net profit of PKR 4.8bn or PKR 3.6/share compared to PKR 3.9bn or PKR 2.9/share same period last year; up by +15%y/y. This takes 1hCY21 cumulative earnings to PKR 10.5bn or PKR 7.9/share compared to PKR 4.5bn or PKR 3.34/share last year same period; up by 2.4x.

Along with the result company announced an interim cash dividend of PKR 4.0/share taking 1hCy21 total payout to PKR 8.0/share compared to PKR 4.0/share last year same period.

On a quarterly basis net sales of the company declined by 13% y/y to PKR 25.9bn owing to a plunge in urea off-takes. However gross margins expanded to 38% (39% reported in previous quarter.), compared to margins of 35% in 2qCy20; an increase of 300bps. This increase in margins is mainly due 2.0x increase in DAP prices and 6% in urea prices. Meanwhile, other operating expense were reported at PKR 452mn, a reduction of 63%y/y owing to high base last year same quarter (PKR 1.2bn other expenses recorded). Moreover, company’s financial charges also reduced by 36%y/y owing to lower borrowing cost and debt retirement. Effective tax rate stood at 28% during 2QCY21 compared to 33% in the same period last year.