Engro delivers outstanding results for Q1 2015

Islamabad, April 29, 2015 (PPI-OT): The Board of Directors of Engro Corporation Limited today announced the financial results for the first quarter ended March 31, 2015. The company posted strong results with our subsidiaries truly reflecting the story of our growth. On a consolidated basis, Engro Corporation recorded an 8% increase in revenue up from PKR 38.3 billion in 1Q14 to PKR 41.4 billion in 1Q15.

The increase came from the fertilizers, foods and polymers businesses, slightly offset due to lower power generation and rice sales. The earnings also increased significantly on the back of better margins from various businesses. The profit-after-tax (attributable to the equity holders) grew from PKR 2,057 million in 1Q14 to PKR 3,636 million in 1Q15, posting an increase of 77% over same quarter last period.

The Company intends to build on its strong first quarter results announces Rs.2 interim cash dividend. Engro Fertilizers urea production for the quarter stood at 486KT as compared to 456KT in the first quarter of the last year i.e. an increase of 6.6%, mainly due to continuous operation of both plants during the first quarter of 2015. Further, the Company sold 481KT of urea versus 451KT in the first quarter of 2014 showing a growth of 6.2% and locking in an overall urea market share of 32% and a branded urea market share of 40%.

Subsequent to the year-end, the shareholders of Engro Corporation, in the Annual General Meeting held on April 22, 2015 have approved the sale of entire shareholding of the Company in Engro Eximp (including Eximp FZE) to Engro Fertilizers, together with the rights to use ‘Engro’ trademarks (under license from Company to Eximp) for imported fertilizers and associated products.

Engro Foods had a resounding start to the year with 25% growth in revenues and 385% growth in overall profitability, on a year over year basis, on the back of robust performance in the dairy and beverages segment. Revenue for the period was PKR 12.6 billion versus PKR 10 billion in the same period last year, while the overall profits were PKR 1,069 million versus PKR190 million in the same period last quarter. Sustained and impactful investment on brands and effective pricing strategy were the key elements in achieving a double digit growth, further accentuated by favourable commodity prices.

Engro Powergen Qadirpur Limited (EPQL) earned a PAT of PKR 459 million in 1Q15 versus PKR 585 million in the same period last year, as a result of WAPDA grid issues resulting in lower Net Electric Output of 365 GwH dispatched to the national grid versus 442 GwH dispatched in same period last year. This resulted in lower load factor of 79% compared to 95% in 1Q14.At the quarter-end, overdue receivables from PEPCO stood at PKR 1,852 million versus PKR 1,210 million at the last year-end. The overdue payables to SNGPL at quarter-end were PKR 329 million versus PKR 232 million at year-end.

Engro Polymer posted revenues of PKR 6.7 billion in 1Q15 versus PKR 5.4 billion in same periods last year. 61% increase in domestic PVC sales to 40.3KT and 9% increase of caustic domestic sales to 23.7KT as compared to same period last year accounted for the 25% increase in revenues versus same period last year. Despite higher sales volume, the company posted a loss-after-tax of PKR 107 million versus profit-after-tax of PKR 148 million for the same period last year, due to higher energy prices, duty impact on raw material and high cost raw material inventory carried over from last year.

Engro Vopak recorded revenue of PKR 646 million and profit-after-tax of PKR 431 million during 1Q15 versus PKR518million and PKR 394million respectively during same period last quarter. The increase in top and bottom line mainly came from positive tariff impact of LPG import as SSGCL’s terminal remained close for the first two months and all LPG imported to the country was therefore handled by EVTL.

During the year 2014, Engro embarked on the journey to build Pakistan’s first LNG Storage and Regasification Terminal. A LNG Operations and Services Agreement (LSA) was entered into with Sui Southern Gas Company Limited (SSGCL) in April 2014, whereby we had committed to achieve commercial operations by March 31, 2015.

On March 29, 2015, the Company received Certificate of Acceptance from SSGCL after successful completion of tests as per LSA and initiated delivery of re-gasified LNG to SSGCL. The project was constructed ahead of time on March 29, 2015, in a record period of 300 days, making it amongst the fastest terminals built in the world.

The project has yet again demonstrated Engro’s commitment towards the betterment of the country as it will enable the Government of Pakistan to alleviate the increasing natural gas shortage of the country by up to 30%. The Project has been built utilizing the existing infrastructure of Engro thus resulting in reduced capital expenditure as compared to other terminals across the globe and one of the lowest tariffs in the world of $0.66/mmbtu.

After successful completion and acceptance of tests on 29th March, 2015, the company is expected to maintain its operations. The project will play a significant role in alleviating the country’s energy shortage by up to 30%. On the Thar coal project, mining activities of SECMC are on track and as per schedule.

During the quarter, over-burden removal continued and2.7 million BCM removal work has been completed. The development of Phase I of LBOD fresh water supply scheme stands at 64%. Similarly, Phase II is being continuously monitored for development and is expected to be completed by December 2016.Coal Tariff Petition submitted by SECMC has been admitted and public hearing on tariff petition was held during February 2015 in Karachi.

Engro Corporation is geared to contributing positively to resolving the country’s energy crisis with the Thar coal project and the LNG business as its cornerstones. The Company continues to explore the agri/food vertical as it aligns its businesses to serve the future demands of the country. With growth as the Company’s foremost priority, Engro remains on the look-out to venture into new product lines and businesses within its strategic focus areas.

For more information, contact:
Shamikh Ahmed
Engro Corporation Limited
8th Floor, Harbor Front Building, HC # 3,
Marine Drive, Block 4, Clifton
Karachi, Pakistan
Phone: +92-21-111-211-211
Fax: +92-21-35295948
Cell: +92-302-8275133
Email: sazaidi@engro.com, media.relations@engro.com
Website: www.engro.com

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