ENGRO has announced its CY15 result today, wherein consolidated profit attributable to equity shareholders has clocked in at PKR13.8bn (EPS PKR26.3), up 97%. The result was in line with our expectations. Along with the results, the board has also declared final cash dividend of PKR7.0/share, taking full year payout to PKR18.0/share.

With the result of listed subsidiaries already announced, the 97% rise in profitability during CY15 can be attributed to i) 77% rise in profits of fertilizer business, thanks to stable gas flows and commencement of USD0.7/mmbtu concessionary gas and ii) 2.6x growth in EFOODS earnings mainly due to 4.4pps higher gross margins on the back of 31% fall in average WMP prices. Further, positive contributions from EPQL, VOPAK and LNG business added to the profitability.

On the negative side, polymer remained in loss; posting loss of PKR649mn due to subdued PVC-ethylene core delta, however the quantum of loss declined by 36% due to reversal of certain provisions. Further, expected subdued performance of rice business coupled with a hefty PKR3.4bn impairment charge has put some brakes on the bottom-line growth.

During 4Q, profits jumped to PKR4.9bn (EPS PKR9.4), up 4.6x QoQ mainly on the back of exceptional earnings performance in fertilizer business, growing 91% QoQ. Further, profitable last quarter of EPCL along with reduced quantum of impairment charge (down 38%) strengthened the bottom-line.


By Taurus