Engro Fertilisers’ earnings after tax dropped 4% to Rs5.5 billion in the first quarter of the calendar year 2022, owing to a large rise in finance costs.
The urea-producing company made a profit after tax of Rs5.7 billion in the same time last year, according to a notification issued to the Pakistan Stock Exchange.
The company’s earnings per share fell from Rs4.3 in January-March 2021 to Rs4.13 in January-March this year.
In line with the release of the results, the firm declared an interim cash dividend of Rs5.5 per share. In the first quarter of 2021, it paid a dividend of Rs4 per share.
Net sales for the quarter under review were Rs36.8 billion, up 25% from Rs29.4 billion in the previous year’s equivalent quarter.
“The first quarter of 2022 saw a 13 percent and a 96 percent increase in urea and di-ammonium phosphate (DAP) prices, respectively, followed by a 5% increase in DAP offtake,” stated Arif Habib Limited analyst Muhammad Iqbal Jawaid. “At the same time, urea use dropped by 11%.”
The industrial feed gas rate accrued at the company’s EnVen plant since the concessionary gas term expired on June 30, 2021, resulting in gross margins of 29.5 percent (down 975 basis points year over year) in the first quarter of 2022.
In the January-March 2022 quarter, selling and distribution expenditures increased by 10.27 percent to Rs2 billion. From January-March 2021, the corporation paid Rs1.8 billion under the same heading.
Administrative expenditures grew by 9.1% from Rs411.5 million in the first quarter of 2021 to Rs449.1 million in the same period of the current calendar year.
Other income increased by 7% to Rs511 million in January-March 2022, compared to Rs479 million in the same period of 2021.
In the January-March 2022 period, finance costs increased by 76.4 percent to Rs475 million. At the same time last year, the business paid Rs269 million under the same heading.
