KARACHI: Pakistan’s premier conglomerate, Engro Corporation announced its financial results for the quarter ended March 31, 2021. The Covid-19 pandemic continues to be an unprecedented global challenge that is, to date, having devastating effects on public health, economies, and societies around the world. As vaccination programs roll-out globally, Pakistan too is procuring Covid-19 vaccines from various manufacturers and has launched its vaccination drive in Q1 2021.
Despite these challenging times, we remain committed to our Central Idea which guides us to improve lives of all Pakistanis and have a positive impact on the society. In order to tackle the 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 Rs 1 billion for short / medium / and long-term recovery. To date, Rs 376 million have been donated via cash and kind with focus on disease prevention, protecting and enabling healthcare practitioners and frontline workers, enabling patient care and facilities and bolstering livelihoods and sustenance of the most deserving in society. We believe we must remain fully transparent while attempting to make an impact and work towards saving lives.
On the business side, Engro’s consolidated revenue grew by 58 percent from Rs 44,977 million during the first quarter 2020 to Rs 70,866 million in the first quarter 2021. The Company posted a consolidated profit after tax (PAT) of Rs 14,779 million compared to Rs 5,940 million for the similar period last year. Profit attributable to the owners was recorded at Rs 8,337 million compared to Rs 3,317 million for the prior period, resulting in an earnings per share (EPS) of Rs 14.47 compared to Rs 5.76. This growth in the results is primarily attributable to the higher profitability reported by Engro Fertilizer and Engro Polymer and Chemicals.
On a standalone basis, the Company posted a PAT of Rs 3,586 million against Rs 780 million for the same period last year, translating into an EPS of Rs 6.22 per share. The Company announced an interim cash dividend of Rs 12 per share for the first quarter.
Financial Performance
Fertilizers: Domestic market witnessed strong agricultural sector performance in the first quarter as farm economics continued to improve, driven by better farm output prices and enhanced support pricing. The Company produced 523000 ton of urea versus 572000 ton for the comparative period due to a turnaround in one of the plants. The Company delivered quarterly urea sales of 582000 ton against 169000 ton and Phosphate sales of 74000 ton against 36000 ton during the same period last year. As a result, the PAT for the Company stood at Rs 5,741 million for the first quarter of 2021 as compared to Rs 571 million in the same period last year.
Petrochemicals: During the first quarter of 2021, international prices of PVC rose to an unprecedented level of $1,670 per ton as the winter storm in the US drove multiple unplanned shutdowns and forced majority of the PVC capacity offline. Furthermore, the Company announced commercial operations of the new PVC plant on 1st March 2021, which increased the total capacity to 295,000 MT per annum.
During the first quarter of 2021, the Company recorded a revenue of Rs 15,671 million as compared to Rs 7,058 million in the first quarter of 2020. With increased volumetric sales, efficient operations and higher international prices, the Company posted a PAT of Rs 4,143 million compared to a PAT of Rs 193 million for the same period last year. This is the highest quarterly profit ever achieved by Engro Polymer and Chemicals.
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. This portfolio expansion has led to a significant increase in the market share as an Independent TowerCo from 41 percent in 2020 to 44 percent during the first quarter of 2021.
Energy & Power:
Mining and power plant operations at Thar continued smoothly, with over a million tons of coal being supplied by the mine. The plant remained fully operational and achieved 81 percent availability with a load factor of 76 percent and a dispatch of 987 GwH to the national grid during the quarter. Meanwhile, the expansion of the mine at Thar to increase output 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 percent compared to 37 percent during similar period last year. The business posted a PAT of Rs 399 million for the current period as compared to Rs 895 million for Q1 2020, which is mainly attributable to retirement of debt component.
Terminals: Profitability of both the LNG and chemicals terminal remained healthy for the current quarter. The LNG terminal handled 18 cargoes, delivering 52.8bcf re-gasified LNG in to the SSGC network. The chemicals terminal had an actual throughput of 286 kT versus 246 kT during the similar quarter last year. The increase was primarily observed in chemical volumes, offset by lower LPG handling—PR
Copyright Business Recorder, 2021
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