Engro announces after-tax profit of Rs 5.59 billion

The Board of Directors of Engro Corporation Limited have announced a profit after tax of Rs 5.59 billion for the nine months ended September 30, 2011. According to a press release issued here on Monday, Engro Corp's revenue recorded an increase of 47 percent and stood at Rs 79 billion for the nine months ended, September 30, 2011, as compared to Rs 54 billion in the same period last year.
The company announced an EPS of Rs 14.21 (basic and diluted) for the nine months ended September 30, 2011.
Fertilizer: In the first nine months of 2011, the fertilisers business sold 954,000 tons maintaining a 23 percent share of the fertiliser market as compared to 15 percent in the same period of 2010. The business made a net profit of Rs 3,510 million for the nine months ended September 30, 2011, as compared to a profit of Rs 2,879 million for the same period last year
The fertiliser trading business, managed by Engro Eximp, sold 204,000 tons of phosphatic fertilisers in the nine months, capturing 32 percent of the market share. Engro Eximp made a profit of Rs 632 million for the nine months ended September 30, 2011 as compared to a profit of Rs 989 million for the same period last year. The profit is in line with expectations and the decline in overall profits versus last year was due to the higher initial losses in the rice business.
Foods: Dairy and Juice segment sales were Rs 19.2 billion during the nine months, compared to Rs 13.7 billion for the corresponding period last year with a growth of 40 percent. Dairy volume grew by 20 percent versus the same period in 2010, translating into a revenue growth of 40 percent. The ice cream segment achieved a 45 percent volumetric growth over the corresponding period last year, with revenue growing by 64 percent. Fruit Juices and Nectars showed consistent growth during the nine months with new flavours being added to the portfolio. The foods business made a net profit after tax of Rs 408 million in the nine months ended, September 30, 2011 as compared to a profit of Rs 35 million for the same period last year. The rice trading business, managed by Engro Eximp, exported 13,395 tons of rice during the nine months, as compared to 3,179 tons in the same period last year.
Petrochemicals: The petrochemicals business had an increase in domestic PVC sales to 82,000 tons in the nine months, as compared to 74,000 tons in the corresponding period last year. VCM production for the nine months was 57,000 tons as compared to 36,000 tons in the corresponding period last year. Engro Polymer and Chemicals Limited incurred a loss of Rs 440 million for the nine months ended September 30, 2011, compared to a loss of Rs 762 million in 2010.
Energy and Power: The business's power plant in Qadirpur dispatched 414k Mwh to the national grid during the third quarter of 2011. The Qadirpur power facility declared a net profit of Rs 1,239 million for the nine months ended, September 30, 2011 as compared to Rs 377 million during the same period last year. The profits of the business surged due to nine months operations as opposed to 6 months operations of the plant in the corresponding period last year.
Others: In the chemical storage and terminal business, Engro Vopak Terminal Limited posted a profit of Rs 781 million for the nine months ended 30 September, 2011 as compared to a profit of Rs 793 million during the same period last year.
About the rationale behind urea price increase, the company said that owing to the continued gas shutdown and inaction by the government thus far to the Sindh High Court decision of October 18th which ordered the complete restoration of 100mmscfd of gas to the plant in strict accordance with SNGPL contract and sovereign guarantee, Engro Fertilisers Limited has increased the price of urea by Rs 400 per bag to Rs 1980 per bag inclusive of GST effective 31st October 2011.
The government has indirectly imposed a Rs 100 billion rupee a year tax on the farmers by not implementing the Sindh high court decision. For every 4 days the judgement is not implemented it is costing the farmers of Pakistan over 1 billion rupees.
Had the government followed through the legal judgement, more urea production in the country would have resulted in the farmer benefiting a total Rs 600 to Rs 700 per bag due to more urea supply in the market and Engro had officially stated it would have reduced price by Rs 350 to Rs 400 per bag.
Engro plant with an annual production of 1.3 million tons annually (set up in December 2010) has not received gas for 151 days in 2011. Should gas be fully resumed as per the Sindh High Court Judgement, Engro Fertilisers Limited will look to reduce prices to help farmers.-PR