Pakistan Alert: (August-22-2013) Engro Corp: 1H2013 EPS Rs6.73 August 22, 2013 Engro Corp has announced 1H2013 profits of Rs3.4bn (Rs6.73 per share) as against loss of Rs135mn (Rs0.67 per share) in same period last year. The announced earnings are below the street consensus of Rs7.3-7.7 After witnessing adverse operating environment in 1H2012, turnaround in its flag ship urea business in 1H2013 provided addition imputes to the holding company’s profitability. Profit of Rs2.8 per share from Engro Fertilizers was further magnified by Rs1.9 per share earnings contribution coming in from Engro Foods. The company’s fully owned subsidiary operated its new fertilizer plant during 1H2013 resulting in efficient production, this coupled with favorable agricultural conditions strengthened its urea sales by more than 50%. Engro Corp’s overall revenues grew by 25% to Rs66.8bn while cost of sales was up by 21%, as a result Engro Crop. posted healthier gross margins at 27%, up 3pps. Due to lower interest rate scenario company’s financial cost was down by 11% to Rs6.8bn versus Rs7.6bn in the same period last year. On quarterly basis, the company’s earnings were down by 7% to Rs1.6bn (Rs3.24 per share). We believe lower earnings are due to 24% higher financial charges to Rs3.8bn as against Rs3.1bn in the previous quarter. At current levels, we maintain ‘Buy’ on the scrip. Regards, Asad I. Siddiqui
Posted on: Thu, 22 Aug 2013 11:15:09 +0000
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