Karachi, February 14, 2014: The Board of Directors of Engro Corporation Limited today announced the financial results for the year ended December 31, 2013.
Engro Corp posted a record 2013 consolidated profit after tax of Rs. 8,183 million vs. depressed profit after tax of Rs. 1,333 million in 2012. The company achieved PKR 155,360 million revenue in 2013 vs. PKR 125,151 million in 2012. The record profitability was achieved by a turnaround in its fertilizer business coupled with an impressive performance by Polymer, a healthy contribution by Vopak and EXIMP’s return to profitability. Engro Corporation’s total shareholder return of 72% during 2013 was higher than the returns provided by KSE. As a result of the improved financial performance, PACRA upgraded the company’s entity rating from ‘A’ to ‘AA-‘during the year. The company also announced an EPS of Rs. 16.01 for the year ended December 31, 2013 as opposed to the EPS of Rs. 2.61 in 2012. It resumed dividend payment with a novel specie dividend of 1 Engro Fertilizers share for every 10 shares of Engro Corp.
During 2013, the company made a profit after tax of PKR 5,497 million vs. a loss of PKR 2,935 million last year. Engro Fertilizers revenue for the year was PKR 50,129 million vs. PKR 30,627 million in 2012.
The Company’s blended fertilizers’ (Zarkhez & Engro NP) sales for the year increased by 21% to 95 k tons compared to 80 k tons during 2012. Pakistan’s overall potash market remained stable at 20 KT (nutrient basis) during 2013. Our market share in potash industry increased from 40% last year to around 50% in 2013. Approximately 52,000 farmers were contacted through market development activities.
The Company undertook successful Initial Public Offering (IPO) of 75 million ordinary shares in 4Q 2013. Out of these, 56.25 million shares were subscribed through Book Building process at a price of PKR 28.25 per share and the remaining were offered to the general public. Book Building and the public issue were both over-subscribed by 4 and 3 times respectively, which reflects investor confidence in the Company’s future. As part of the IPO structure, Engro Corporation Limited (ECorp) further divested 30 million shares of the Company. As a result of these transactions ECorp, subsequent to the balance sheet date, holds 91.91% of the share capital of the Company.
The year 2013 was a test of the Company’s resilience due to external challenges, coupled with distribution issues, which impacted its volumes and profitability. The revenue of Engro Foods declined from PKR 40,169 million in 2012 to PKR 37,891 million in 2013 and a decrease in net profit from PKR 2,595 million in 2012 to PKR 1,092 million in 2013 on a like for like basis i.e. excluding one-time charges impacting the profitability.
EXIMP’s revenue during 2013 was PKR 32,853 million vs. a revenue of PKR 20,977 million in 2012. The company’s consolidated profit after tax stood at PKR 59 million in 2013 as compared to a loss of PKR 426 million in 2012. The profitability of fertilizer and commodity trade was off-set by losses in the Rice business despite improvement in operational parameters.
During the year 2013, Qadirpur Plant demonstrated a Billable Availability of 83.1%. It dispatched a total Net Electrical Output of 1,334 GwH to the National Grid with a load factor of 71.7% as compared to 93.8% in 2012. Overdues from PEPCO stood at PKR 1,248 million as on December 31, 2013 against overduesof PKR 5,787 million as on December 31, 2012. Overdue amount payable to SNGPL on Dec 31, 2013 was PKR 386 million vs. PKR 2,683 million in 2012. Engro PowergenQadirpur earned a net profit of 1,458 million during 2013 vs. PKR 2,101 million last year.
Sindh Engro Coal Mining Company (SECMC)
The Company achieved substantial progress on mining activities during the year. Firm EPC bids were received from 4 leading Chinese firms. The land acquisition process is in progress for initial 5,500 acres of land for which no resettlement is required. Notification for procurement of private land has been issued to General Public under the Land Acquisition Act.
Polymer & Chemicals
During 2013, company posted profit of PKR 707 million as compared to PKR 77 million in 2012. Revenue increased from PKR 20,606 in 2012 million to PKR 24,781 million in 2013.The company achieved its highest ever production of VCM and caustic soda during the year.
During the year, the Company modified its ACN tanks whichwere unused since 2010 and brought these under use for storage of EDC for Engro Polymer. Actual throughput for the year was 1,135 KT vs. 1,101 KT in 2012.
Company’s revenue was PKR 2,052 million in 2013 as compared to PKR 2,376 million. The profit after tax for 2013 was PKR 1,219 million vs. PKR 1,488 million in 2012.Decrease is due to LPPTA revised contract.
Elengy Terminal Pakistan Limited, a subsidiary of Engro Corporation Limited won the GOP’s tender for Fast Track LNG in November 2013 and is poised to sign the contract in February 2014. ETPL has formed a subsidiary company Engro ElengyTerminal (Pvt.) Limited (EETL) which will construct a new jetty besides EVTL existing jetty for handling, storage and regasification of LNG. EETL is expected to utilize EVTL’s trestle and utilities.