Karachi – April 21, 2022: Pakistan’s premier conglomerate, Engro Corporation (PSX: ENGRO) announced its financial results for the quarter ended March 31, 2022.

Overview of Financial Performance

During the first quarter, Engro Corporation’s standalone profitability exhibited a substantial growth of 92% and reached PKR 6.88 billion in Q1 2022 from PKR 3.59 billion in Q1 2021. The Dividend Income of the Company grew by 124% during the period reaching PKR 7.70 billion in comparison to PKR 3.43 billion during Q1 2021. The increase in dividend income and standalone profitability is primarily attributable to receipt of higher dividends from the Fertilizer and Petrochemical businesses.

On a consolidated basis, the Company’s revenue grew by 25% to PKR 88.33 billion in Q1 2022 from PKR 70.87 billion in the corresponding period. The Company posted a Profit-After-Tax (PAT) of PKR 14.90 billion, while PAT attributable to the shareholders was PKR 7.97 billion resulting in an Earnings per Share (EPS) of PKR 13.84 compared to PKR 14.47 in same period last year.

Engro Corporation announced an interim cash dividend of PKR 12/- per share for the first quarter.

Portfolio Performance

Fertilizers: Engro Fertilizers Limited (EFERT) recorded a revenue of PKR 36.81 billion in Q1 compared to PKR 29.44 billion whereas a PAT of PKR 5.51 billion was achieved against PKR 5.74 billion in the same period last year. Continuing the momentum built over last year, farm economics continued to improve, driven by better output prices and enhanced support pricing. Urea sales during the period stood at 549 KT vs 601 KT while production during the period increased by 9% to 568 KT versus 523 KT.

Petrochemicals: During Q1 2022, international prices of PVC averaged at USD 1,339 per ton due to supply disruptions in North-East Asia. Supplies to domestic PVC downstream market continued uninterrupted due to steady production from Engro Polymer & Chemicals Limited (EPCL). The topline of EPCL grew by 48% to PKR 23.13 billion against PKR 15.67 billion during Q1 2021. Domestic sales increased to 62 KT from 53 KT that was achieved in the same period of 2021. Quarterly profitability was recorded at PKR 4.71 billion in comparison to PKR 4.14 billion in Q1 2021 showing an increase of 14%.

Telecommunication Infrastructure: Engro Enfrashare (Enfrashare) continued to expand its national footprint and achieved a scale of 2,557 operational tower sites with a 1.13x tenancy ratio. Enfrashare continues to cater to all four Mobile Network Operators (MNOs) in Pakistan and is driven by its objective of becoming a 5,000+ tower company in the next few years. During Q1 2022, Enfrashare has built 50% of the total new sites deployed by independent tower companies in the country. Despite of the increasing number of towers, the business has also capitalized on colocation opportunities to enhance the tenancy ratio from 1.07x in Q1 2021 to 1.13x by the end of March 2022.

Food & Rice: FrieslandCampina Engro Pakistan Limited (FCEPL) demonstrated a topline growth of 21%, recording sales of PKR 13.97 billion as compared to PKR 11.58 billion in Q1 2021. FCEPL reported a PAT of PKR 0.66 billion against PKR 0.55 billion in the same period last year. Improved financial performance was achieved through investment in distribution channels and enhancement of brand equity.

Engro Eximp Agriproducts (EEAP) surpassed the industry growth of 2% in the brown rice segment and recorded 65% growth in comparison to the same period last year. Rice business contributed to foreign reserves and generated revenue of USD 10.2 million through export of 13 KT rice against 9 KT in Q1 2021. EEAP also increased domestic volumes by 40% to 4.41 KT against 3.16 KT in Q1 2021.

Energy & Power: Mining operations continued smoothly, and the mine supplied one million tons of coal to Engro Powergen Thar Limited (EPTL) during the quarter. EPTL achieved 48% availability with a load factor of 47%, dispatching 610 GwH to the national grid during the period. Plant availability remained low due to a forced outage following an incident on the coal conveyor belt. Repair and maintenance work is underway and one 330 MW unit has come online in mid-April while the other 330 MW unit is also expected to come online soon.

Phase II mine expansion of Sindh Engro Coal Mining Company (SECMC) to 7.6 million tons per annum is expected to be completed during Q4 of 2022. Phase III expansion of the mine to 12.2 million tons per annum, that was approved in 2021 by the SECMC board, will also achieve its financial close during 2022.

Engro Powergen Qadirpur Limited (EPQL) dispatched a Net Electrical Output of 124 GwH to the national grid with a load factor of 27% compared to 37% in Q1 2021 due to lower offtake from the power purchaser. The business posted a PAT of PKR 151 million for the current period as compared to PKR 399 million for Q1 2021 due to a scheduled plant shutdown on account of major inspection of the facility.

Terminals: Profitability of both the LNG and chemicals terminal remained healthy for the current quarter. The LNG terminal handled 19 cargoes, in line with last quarter, delivering 54 bcf re-gasified LNG in to the SSGC network. The chemicals terminal had an actual throughput of 381 KT versus 281 KT during the same period last year. The increase was primarily observed in chemical volumes offset by lower LPG handling.

Hussain Dawood Pledge:

Due to an increase in inflation and resultant reduction in purchasing power, Engro enhanced its focus on social investments through the PKR 1 billion Hussain Dawood Pledge that was announced in 2020 to counter the adverse impacts of COVID-19 on the people of Pakistan. To date, the total spend under the Hussain Dawood Pledge stands at PKR 504 million.

For further information, please visit: https://www.hussaindawoodpledge.com/