Pakistan’s premier conglomerate, Engro Corporation has announced its financial results for the 1st quarter of the current Calendar Year that ended on March 31st, 2021.
On the business side, Engro’s consolidated revenue grew by 58% from PKR 44,977 million during the first quarter of 2020 to PKR 70,866 million in Q1 2021. The corporation posted a consolidated Profit After Tax (PAT) of PKR 14,779 million compared to PKR 5,940 million for the same period last year, showing a growth of 148.8pc year-on-year for the same period.
Profit attributable to the owners was recorded at PKR 8,337 million compared to PKR 3,317 million for the prior period, resulting in an Earnings per Share (EPS) of PKR 14.47 compared to PKR 5.76 last year.
This growth in the results is primarily attributable to the higher profitability reported by Engro Fertilizer and Engro Polymer & Chemicals. On a standalone basis, the Company posted a PAT of PKR 3,586 million against PKR 780 million for the same period last year, translating into an EPS of PKR 6.22 per share.
The Company announced an interim cash dividend of PKR 12 per share for the first quarter. The sector-wise performance for different Engro portfolios is given below.
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Fertilizers
Engro Fertilizers is a Pakistani fertilizer manufacturing company and is a subsidiary of conglomerate Engro Corporation. The company reportedly contributes 30 percent to the domestic fertilizer market.
The domestic fertilizer market witnessed strong agricultural sector performance in Q1 as farm economics continued to improve, driven by better farm output prices and enhanced support pricing. The Company produced 523 Kilotons (KT) of Urea vs. 572 KT for the comparative period due to a turnaround in one of the plants.
The Company delivered quarterly Urea sales of 582 KT vs. 169 KT and Phosphate sales of 74 KT vs. 36 KT during the same period last year. As a result, the PAT for the Company stood at PKR 5,741 million for Q1 2021 as compared to PKR 571 million in the same period last year.
Petrochemicals
Engro Polymer & Chemicals Limited (EPCL) is the sole manufacturer of PVC resin in Pakistan and is working to meet a hundred percent of the local demand. Besides this, the company also produces Chlor Alkali products like Caustic Soda, Sodium Hypochlorite and Hydrochloric Acid.
During the 1st quarter of 2021, international prices of PVC rose to an unprecedented level of USD 1,670 per ton as the winter storm in the US drove multiple unplanned shutdowns and forced the majority of the PVC capacity to go offline. Furthermore, Engro Polymer & Chemicals Limited announced commercial operations of the new PVC plant on 1st March 2021, which increased the total capacity to 295,000 MT per annum.
During Q1 2021, the Company recorded a revenue of Rs15,671 million as compared to Rs7,058 million in Q1 2020. With increased volumetric sales, efficient operations and higher international prices, the Company posted a Profit-After-Tax (PAT) of Rs4,143 million compared to a PAT of Rs193 million for the same period last year.
This is the highest quarterly profit ever achieved by Engro Polymer and Chemicals.
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Connectivity
Engro continued to invest and progress in its Connectivity vertical through Engro Enfrashare strengthening its footprint to a portfolio size of 1,577 operational sites (1,265 sites in 2020) while hosting 1,681 tenancies (1,362 tenancies in 2020) and catering to all Mobile Network Operators (MNOs) in Pakistan.
Engro Enfrasare is a relatively new venture of the Engro Corporation that started in 2018 with the vision to accumulate the largest integrated portfolio of telecom infrastructure in the shortest possible time. The company since its inception has invested Rs20 billion in the sector.
This portfolio expansion has led to a significant increase in the market share as an Independent TowerCo from 41% in 2020 to 44% during Q1 2021.
Energy & Power
Engro Energy formed the Sindh Engro Coal Mining Company in collaboration with its partners to unearth and mine one of the world’s largest lignite coal reserves in Thar. Other than this the company continues to give the country power via its different projects.
Mining and power plant operations by Engro Energy at Thar continued smoothly, with over a million tons of coal being supplied by the mine. The plant remained fully operational and achieved 81% availability with a load factor of 76% and a dispatch of 987 GWh to the national grid during the quarter. Meanwhile, the expansion of the mine at Thar to increase the output of coal to 7.8 million tons per annum is underway.
The Qadirpur Power Plant operates on permeate gas and is currently facing gas curtailment from the Qadirpur gas field as it continues to deplete. To make up for this shortfall, the plant has been made available on mixed mode.
The Plant dispatched a Net Electrical Output of 190 GWh to the national grid with a load factor of 41% compared to 37% during the same period last year. The business posted a PAT of PKR 399 million for the current period as compared to PKR 895 million for Q1 2020, which is mainly attributable to the retirement of the debt component.
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Gas and Chemical Terminals
The profitability of both the LNG and chemicals terminal remained healthy for the current quarter. The LNG terminal handled 18 cargoes, delivering 52.8 billion cubic feet (bcf) re-gasified LNG into the SSGC network.
EngroElengy Terminal, a private company with Engro Corporation owning 56% shareholding, is the first company to set up an LNG terminal in Port Qasim.
The chemicals terminal had an actual throughput of 286 KT compared to 246 KT during the same quarter last year. The increase was primarily observed in chemical volumes, offset by lower LPG handling.
Engro’s fight against COVID-19
To tackle the ongoing pandemic’s negative impacts on Pakistan, Chairman Hussain Dawood, on behalf of Dawood Hercules Corporation, Engro Corporation, and his family, pledged a contribution in services, kind, and cash of PKR 1 billion for short / medium / and long-term recovery.
To date, Rs376 million has been donated via cash and cash-in-kind with a focus on disease prevention, protecting and empowering healthcare practitioners and frontline workers, enabling patient care and facilities, and bolstering livelihoods and sustenance of the most deserving in society.
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