LAHORE – The Engro Corporation (Engro) announced 2012 results, where the company posted full year earnings of Rs1.3 billion, down 83 per cent YoY compared to profit of Rs8.1b in the same period last year. In 4Q alone, earnings stood at Rs1.8b compared to profit of Rs2.5b in the corresponding period last year. The major drivers of the profitability are (1) strong EFOODS earnings during 4Q (up 63 per cent YoY) and (2) Engro’s fertilizer business breaking even in the same period. Engro Fertilizer posted a 4Q profit of Rs43mn (Rs0.08/share for Engro Corp) due to record urea offtake in the period while Engro Corp’s share of Engro Foods 4Q profits stood at Rs1.7/share. Amongst the other announced result of ENGRO, Engro Polymer reported a meager loss of Rs6.3mn that translates into Engro Corp’s share of loss of Rs3.5mn.The result was above expectations, primarily because the company booked a one time gain on reversal of liability on disposal of discontinued operations, amounting to PKR252mn.Engro’s revenue grew by 9 per cent YoY to PKR125.2b, mainly driven by 35 per cent growth in sales of the company’s key subsidiary Engro Foods (EFOODS). EFOODS accounted for 1/3rd of the conglomerate’s topline in CY12, compared to 26 per cent revenue contribution last year. Engro fertilizer fell to 2nd place with 25 per cent revenue contribution.Major reason for Engro’s drastic decline in earnings is estimated 28 per cent rise in finance costs to Rs15.8b, 68 per cent of which were contributed by Engro Fertilizer. The fertilizer subsidiary could not operate their new highly leveraged plant for over 8 months in CY12, which led to their operating earnings falling drastically short of financial charges.