LAHORE - Engro Corporation (ENGRO) announced 2Q2012/1H2012 results, reporting a profit of Rs 309m (EPS: Rs0.60) in 2Q, which takes the cumulative 1H2012 loss to Rs340m (loss per share: Rs0.67) compared to a profit of Rs3,381m (EPS: Rs6.61) in the same period last year. As expected, the company did not announce any dividend due to cash flow concerns. Results were somewhat weaker than we expected.

The topline of the company grew 16 per centYoY in 1H2012, however, gross margin has been reduced to 24 per cent in 1H2012 from 28 per cent in the same period last year. Furthermore, ENGRO’s financial charges have also risen to Rs8,584mn, up 95 per centYoY post COD of Enven plant. The same further added pressure to the bottom line. Consequently, the company recorded a loss of Rs340mn (loss per share: Rs0.67). This loss is primarily attributable to its Fertilizer business due to reduced urea sales during the period.

Subsidiary wise details available so far reveal that in 1H2012, Engro Fertilizer reported loss after tax of Rs1,731mn (100 per cent owned), Engro Foods reported PAT of Rs1,018mn (90 per cent owned), Engro Polymer reported PAT of Rs17mn (56 per cent owned) and Engro Vopak reported PAT of Rs674mn (50 per centowned).