KARACHI – The Engro Corporation has announced a final cash dividend of Rs4 per share for the year ended December 31, 2016.
The company reported year-end results and posted a consolidated profit-after-tax (attributable to owners) of Rs69,107 million compared to Rs13,784 million during 2015. Engro Corporation finished 2016 with revenue of Rs157,208 millions.
The company also announced a final cash dividend of Rs4 per share for the year ended December 31, 2016, aggregating to Rs24 per share for the full year. The increase in profit is attributable to one-off gain amounting to Rs58,680 million, recognised in accordance with International Financial Reporting Standards, due to partial divesture of equity stake in Engro Foods.
“I’m pleased to report Engro Corporation’s results have come in at the higher end of our expectations,” said Engro Corporation President & CEO Ghias Khan. “Our ability to consistently execute means we made the most of a year in which we faced some unexpected regulatory headwinds. Decisive actions against our strategic priorities have resulted in a strong foundation for future growth and competitiveness. For 2017, we remain focused on adding shareholder value through a combination of internal alignments and external initiatives,” he remarked.
Engro Fertilisers’ decline in sales is mainly on account of lower urea off-take at subsidized prices. Engro Fertilisers’ profitability was similarly impacted by lower urea off-take in the first half of 2016, and market expectation of price reduction through subsidy. Urea demand improved significantly in second half after subsidy announcement by the government. Engro Fertilisers continued to excel operationally and operated both of its plants with full gas availability.
Engro Foods’ sales declined due to a challenging competitive environment in the dairy sector. This also affected Engro Foods’ profitability this year. Changes in taxation regime also resulted in an increase in cost of sales affecting profitability. Engro Elengy Trminal delivered an incredibly strong year as it hit peak operational capability with an average utilisation of 99.4 percent. This meant handling 44 cargoes during 2016 versus just 17 cargoes in 2015.
The petrochemicals business (Engro Polymer) also excelled operationally with its highest ever production and strong volumetric growth in sales. Cost efficiency measures instituted this year, while maintaining focus on high HSE standards, translated into profits of Rs660 million for the year as opposed to a loss of Rs644 million during 2015.
Within Engro’s energy assets, the Qadirpur plant performed well as per guidance. In a major milestone for Thar, the business was able to satisfy all conditions under financing agreements and achieved financial close for the Thar Coal Power Project on April 4, 2016. The project has made substantial progress on all engineering, procurement and construction (EPC) fronts.
Overall project progress is on course and development initiatives for local communities are underway.