KARACHI: Engro Corporation has posted a profit of Rs2.5 billion in the second quarter ended June 30, 2016, down 43% compared to Rs4.4 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Thursday.
Earnings per share (EPS) came down to Rs3.49 in Apr-Jun 2016 from Rs8.34 in the corresponding quarter of previous year.
The quarterly result took total profits of the company in the first six months (Jan-Jun) of 2016 to Rs6.9 billion (EPS Rs10.54), down 28% year-on-year from Rs9.6 billion (EPS Rs15.28).
The company also announced an interim cash dividend of Rs7 per share, which took payout in the first half of the calendar year to Rs12 per share.
Topline Securities commented in its report that the result was below street consensus, which hit its share price that closed at Rs325.75, down 1.82%, on the PSX. The benchmark KSE 100-share Index closed at 39,771, down 286 points or 0.71%.
Engro’s fertiliser business (EFERT) remained a laggard in the Apr-Jun quarter mainly due to feeble urea off-take (down 29% quarter-on-quarter to 203,000 tons) in anticipation of lower prices and because of the impact of super tax.
This led to a drop in the company’s profit to Rs673 million, down 68% quarter-on-quarter.
Engro’s food business also had a lacklustre quarter due to weaker margins amid volumetric decline in the dairy segment coupled with earnings erosion due to super tax. Hence, earnings dwindled by 23% quarter-on-quarter to Rs853 million.
Engro Powergen Qadirpur Limited, however, was the star performer with a stellar quarterly growth, up 100% to Rs877 million, due to lower electricity generation allowing margin accretion and a one-off insurance claim by the company.
Similarly, the chemical business (Engro Polymer and Chemicals Limited) returned a decent profitability of Rs22 million, up 24% quarter-on-quarter, since lower ethylene prices supported wider margins during the second quarter of calendar year 2016.