AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Engro Holdings Ltd. (ENGROH) reported a substantial increase in its earnings for the second quarter of the calendar year 2025. The company announced a consolidated earnings figure of PKR 33.7 billion, reflecting a significant rise from the PKR 1.9 billion reported in the same period last year. This marks a 17-fold year-on-year increase in earnings.
This impressive performance was primarily driven by the continuation of Engro’s energy portfolio, which contributed significantly to the earnings. However, the earnings result fell short of some expectations due to higher-than-expected administrative expenses, likely linked to transaction costs.
For the first half of the calendar year 2025, Engro’s earnings reached PKR 35.6 billion, marking a 9.1-fold year-on-year increase. A major portion of this growth, PKR 26.6 billion, was attributed to the reclassification of the energy portfolio as continued operations. Recurring earnings, excluding this reclassification impact, stood at PKR 9.0 billion.
Administrative expenses for the quarter surged by 2.4 times year-on-year to PKR 9.7 billion. This increase is likely associated with the company’s acquisition activities, specifically the ‘Deodar’ acquisition.
Segment analysis reveals Engro Energy Ltd. contributed PKR 5.4 billion during the quarter. Meanwhile, Engro Fertilizers (EFERT) saw a 3.3-fold increase in earnings, driven by substantial growth in urea and DAP offtakes, which expanded gross margins significantly.
Conversely, Engro Polymer and Chemicals Ltd. (EPCL) faced challenges, posting a loss of PKR 2.4 billion due to higher gas tariffs and weaker PVC margins. Elengy terminal’s profitability remained stable at PKR 1.1 billion, with operational costs balanced by reduced finance costs. FrieslandCampina Engro Pakistan Ltd. (FCEPL) contributed PKR 93 million, down from PKR 235 million in the previous year, mainly due to increased taxation.
Despite some segments facing hurdles, AKD Securities Limited maintains a ‘BUY’ stance on Engro Holdings. The firm anticipates that profitability growth from existing segments, along with expansion into the telecom sector and energy sector reforms, will bolster future prospects. AKD has set a target price of PKR 301 per share for December 2025.