Ayesha Mudassar

The revenues of Engro Corporation Limited (ENGRO) grew by 26.3%, gross profit by 30.7%, and net profit by 42.8% in the nine months (January-September) of the calendar year 2023 (9MCY23) compared to the corresponding period of the previous year, WealthPK reports.As per the consolidated interim statement, the company posted revenue of Rs339.2 billion and gross profit of Rs105.6 billion in 9MCY23. The net profit stood at Rs43.8 billion compared to Rs30.7 billion in the corresponding period last year, resulting in an earnings per share (EPS) of Rs41.56 versus Rs26.78 in the same period last year.

The company’s gross margins in 9MCY23 settled at 31.1% compared to 30.1% previously, and its net profit margin increased from 11.4% in 9MCY22 to 12.9% in 9MCY23. This shows that the company managed to control its expenses more effectively. The better performance is attributable to higher urea sales, urea price increases, and higher earnings from denominated businesses.

Quarterly analysis

In comparison to the third quarter of 2022, Engro Corporation’s revenues increased 50% from Rs91.2 billion to Rs136.8 billion in 3QCY23. In 3QCY23, the gross profit increased by 66.7% from Rs26.6 billion in 3QCY22.  The company reported a net profit of Rs13.8 billion and Rs22.3 billion, respectively, in 3QCY22 and 3QCY23, which represents a significant improvement in profitability, with a percentage change of 61.1%.

Company profile

Registered on Pakistan Stock Exchange with the symbol “ENGRO”, the company is one of Pakistan’s largest conglomerates with a business portfolio spanning across four verticals, including food & agriculture, energy & related infrastructure, petrochemicals, and telecommunication infrastructure. Today, Engro is one of Pakistan’s most progressive, growth-oriented organisations, managed under a holding structure that works toward better management and oversight of subsidiaries and affiliates that are part of Engro’s capital investments in Pakistan.

Near-term outlook

The company anticipates significant challenges arising from political dynamics, inflationary pressures, and currency fluctuations. However, Engro Corporation is determined to work closely with the relevant authorities to overcome these challenges to strengthen its presence and explore new growth opportunities.

Historical performance

Historical analysis of ENGRO shows that in the last four years (2019-2022), its profit-after-tax (PAT) kept increasing. The company posted the highest PAT in 2022 at Rs21.2 billion. ENGRO posted a PAT of Rs14.3 billion in 2019, Rs16.3 billion in 2020, Rs18.5 billion in 2021 and Rs21.2 in 2022. Furthermore, ENGRO posted the highest four-year EPS of Rs36.7 in CY22.

Credit: INP-WealthPk