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Karachi, August 16, 2012 (PPI-OT): The Board of Directors of Engro Corporation Limited today announced the financial results for the first half ended, June 30, 2012.
The gas situation continues to impact the bottom line of the Company severely impacting the operations of the fertilizer business. The new plant operated for a month only due to severely curtailed gas supply on the network.
The gas curtailment coupled with influx of imported urea by the Government of Pakistan which was sold significantly below the market price resulted in the eventual decline of local branded urea sales for the Company to 397,000 – which was 31% lower from 575,000 tons for the same period last year.
Consequently, the business made a net loss of Rs. 1,731 million during 1H2012 vs. a net profit of Rs. 2,175 million during the same period last year. The loss is directly attributable to decreased sales volume, lower margins, higher depreciation and the financial costs pertaining to post-commissioning of the new plant.
On the contrary, the foods business continued its rapid growth trajectory registering a turnover increase of 45% to Rs. 19.8 billion during the first half of 2012 as compared to Rs. 13.7 billion for the corresponding period last year.
The business announced a profit after tax of Rs. 1.02 billion in 1H2012 registering a growth percentage of 368% as opposed to Rs. 216 million during the same period last year. In addition, the Company’s investment in the Halal Foods business in Canada, Al Safa, also achieved sizable sales revenue of Canadian $ 5.7 million during the first half of 2012.
The petrochemicals business saw an increase in domestic PVC sales to 62 Ktons in 1H 2012, as compared to 55 Ktons in the corresponding period last year. The business posted a net profit of Rs.59 million for the six months ended June 30, 2012, compared to a loss of Rs.195 million in 1H 2011. The higher profitability was mainly attributable to increased volumes and higher caustic prices as compared to the same period last year.
During the first half, the Engro Qadirpur Powergen plant dispatched a total of 870.2 GWh to the national grid and demonstrated a billable availability of 100.8%. The business declared a net profit of Rs. 1,065 million during 1H2012 as compared to Rs. 745 million during the same period last year. The increase is due to higher gas efficiency and initiatives taken to ensure plant reliability and availability to the national grid. However, the substantial rise in the receivables due to circular debt is a major cause of concern for the business.
The chemical storage and handling business – Engro Vopak Terminal Limited (EVTL) – had smooth operations in the first half and posted a net profit of Rs. 673 million in 1H2012 as compared to a net profit of Rs. 478 million during the same period last year. The improved profitability was primarily due to the company moving from normal taxation to presumptive taxation.
The consolidated revenue of the Company stood at Rs. 53.3 billion for the first half 2012, as compared to Rs 46.1 billion in the same period last year, while net loss after tax (attributable to equity holders of the holding company,) was Rs. 340 million as compared to a net profit after tax of Rs. 3,381 million in the same period last year. The Company announced an EPS of Rs. -0.67 (basic) for the 1H2012.
With regards to the future outlook the gas supply situation is not expected to improve in near term. Due to this and severely limited gas supply on the network, during 1H2012, Engro Fertilizer’s cash flows are not sufficient for principal payments due in 2H2012; therefore, discussions have been initiated with most of the Company’s lenders to extend the tenure of financing. Moreover, the company continues to explore other gas supply options including off-network gas fields for sustainable energy supply.
For the remaining year the Company expects to consolidate performance across the subsidiaries and continue working with stakeholders to pursue growth and value creation across the board.
For more information, contact:
Amir Shahzad
Public Affairs Department
Engro Corporation Limited
Tel: 92-21-3529 7501
Fax: 92-21-3529 5948
Email: feedback@engro.com
Web: www.engro.com