Karachi, October 12, 2023 – Engro Fertilizers (EFERT) has reported its financial results for the third quarter of 2023, posting the highest consolidated quarterly profit in its history at Rs9.6 billion.
This outstanding performance translated to earnings per share (EPS) of Rs 7.17, reflecting an impressive year-on-year (YoY) increase of 129 percent.
This achievement contributes to the company’s strong financial performance for the first nine months of the calendar year 2023, where it has recorded a total profit of Rs15 billion, with an EPS of Rs11.27, marking a remarkable YoY growth of 57 percent.
In addition to these remarkable results, Engro Fertilizers announced an interim cash dividend of Rs6.0 per share for the third quarter, bringing the cumulative dividend for the first nine months of 2023 to Rs12.5 per share.
Financial analysts at Topline Securities have noted that the third-quarter results surpassed industry expectations, primarily due to higher-than-estimated net sales. The company’s net sales for this quarter increased by 85 percent YoY, reaching Rs66 billion. This impressive growth was driven by a significant increase in the offtake of Urea and DAP (Diammonium Phosphate), rising by 54 percent and 63 percent YoY to 655,000 and 84,000 tons, respectively. A higher retention price also contributed to the surge in net sales.
Gross margins improved by 4.9 percentage points YoY, reaching 31.7 percent in the third quarter of 2023, aligning with the expectations of financial analysts.
Selling and distribution expenses increased by 56 percent YoY, mainly due to the higher sales volumes of Urea and DAP.
Other income recorded a substantial growth of 260 percent YoY, reaching Rs737 million in the third quarter of 2023, attributed to higher interest income. However, further details are awaited to provide more clarity on this increase.
Despite a higher interest rate environment, the finance cost decreased by 14 percent YoY and 29 percent quarter-on-quarter (QoQ), which is possibly related to loan retirement.
The effective tax rate for the third quarter of 2023 was 39 percent, compared to 33 percent in the same period of 2022 and 85 percent in the second quarter of 2023.
Engro Fertilizers’ exceptional financial results underscore its continued success and commitment to delivering strong performance in the industry. The company’s robust financials and strategic decision-making have contributed to its outstanding achievements in the sector, positioning it as a leading player in the fertilizer industry.
