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AKD Securities Limited – ENGRO: CY14 Result Review

Karachi, February 18, 2015 (PPI-OT): Engro Corporation Limited (ENGRO) announced NPAT of PkR7.80bn (EPS: PkR13.59) in CY14, lower by 6%YoY vs. NPAT of PkR8.32bn (EPS: PkR15.29) posted in the previous year. In 4QCY14, the company recorded NPAT of PkR2.64bn (fully diluted EPS: PkR5.07), up 32%QoQ against NPAT of PkR1.99bn (fully diluted EPS: PkR3.27) the company posted in 3QCY14. In addition to this, CY14 result was accompanied by a final cash dividend of PkR4/sh.

Key highlights of the result include: 1) topline growth at 13%YoY in CY14 owing to 23%YoY increase in EFERT’s topline alongside EFOODS’ 14%YoY topline growth, 2) 36%YoY increase in ‘other income’ on back of interest earned on the GIDC that is yet to be paid out to the GoP (approx. PkR12-14bn), 3) 21%YoY decrease in finance cost to PkR12.34bn in CY14 on account of early payments and monetary easing environment, and 4) 6pts YoY decline in effective tax rate to 29%. ENGRO closed up 1.2% today, buoyed by a +ve surprise on payouts. AKD Securities Limited looks to revisit AKD Securities Limited investment case for ENGRO post the company’s analyst briefing tomorrow.

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