Qudsia Bano

Engro Fertilizers Limited’s revenue increased to Rs110.9 billion in the first nine months of calendar year 2022 from Rs92.7 billion over the same period of 2021, posting a 20% increase year-over-year. The company's gross profit increased to Rs32 billion in 9MCY22 from Rs31 billion in 9MCY21, registering a 4% growth year-over-year. However, the company’s profit-before-tax for the nine-month period under review stood at Rs21 billion, down from Rs21.6 billion over the same months of 2021. The post-tax profit in 9MCY22 fell 36% to Rs9.5 billion from Rs14.9 million 9MCY21.

The imposition of super tax on the fertiliser industry was the main cause of the decline in the firm’s profitability. The business paid Rs5.5 billion in super tax. Also, the firm faced significant hurdles due to demand damage following the floods in mid-2022, foreign exchange volatility and other inflationary pressures, WealthPK analysis of the firm’s stats shows.

Industry Comparison

 The companies that have been considered the competitors of Engro Fertilizers are Fauji Fertilizers Limited, Fatima Fertilizers, and Dawood Hercules. Based on its price-to-earnings ratio in comparison to the average of its peers’ 7.1x, the firm has a solid investment standing at 7x. Engro Fertilizers Limited appears to have a high market capitalisation compared to its competitors.

The earnings per share (EPS) of the company demonstrated a mix trend during recent years. During CY19, the EPS stood at Rs13.90, and decreased to Rs12.59 in CY20, but then jumped to Rs15.78 in CY21. The price earnings growth (PEG) of the company stood at the high of 11.38 in 2019, but then plunged in the following years. The net profit margin of the company also showed steady growth in recent years. During FY19, this margin was 23.43%, which decreased to 22.40% in CY20. However, the net profit margin increased to 23.26% in CY21.

The performance of Engro Fertilizers on Pakistan Stock Exchange has generally been in sync with the overall performance of the bourse.

About Company

Engro Fertilizers Limited is a public company incorporated in Pakistan on June 29, 2009, as a wholly-owned subsidiary of Engro Corporation Limited (the holding company), which is a subsidiary of Dawood Hercules Corporation Limited (the ultimate parent company). Engro Fertilizers is engaged in manufacturing, purchasing and marketing of fertilisers, seeds and pesticides, besides providing logistics services.

Credit: Independent News Pakistan-WealthPk