KARACHI  -  On a consolidated basis, Engro Cor­poration’s revenue grew by 35% to PKR 482 billion in 2023, while con­solidated PAT before accounting im­pact due to remeasurement of ther­mal energy assets increased to PKR 66 billion versus PKR 46 billion last year, recording an EPS of PKR 63.01. 

Major variance is attributable to higher urea sales, efficient plant operations, higher earnings from dollar-denominated businesses, and efficiencies derived through cost op­timization. However, after incorpo­rating the accounting impact due to remeasurement of thermal energy assets, the consolidated PAT stood at PKR 36 billion with an EPS of PKR 38.60 in 2023. Engro Corporation announced a final cash dividend of PKR 2/- per share for the year. This is in addition to the PKR 46/- per share dividend announced during the year, bringing the cumulative payout to PKR 48/- per share.

PROPOSED DIVESTMENT OF THERMAL ENERGY ASSETS

Referring to the various disclo­sures made at PSX by the Company regarding the ongoing discussions with Liberty Mills Limited along with other parties acting in concert, the Company is now evaluating to execute the proposed divestment of the Company’s thermal energy assets comprising of shareholding in Engro Powergen Qadirpur Limited, Engro Powergen Thar (Pvt.) Limited and Sindh Engro Coal Mining Company Limited held via Engro Energy Lim­ited through a sale of shares process.

SECP vide SRO 986 (I)/2019 dat­ed September 2, 2019, has granted specific exemptions to Independent Power Producers (IPPs) from the applicability of IFRS 9, IFRS 16 and IAS 21. As a result of this, debt com­ponent recovered from CPPA-G as part of tariff approved by NEPRA is recorded as revenue in the profit or loss statement over the life of the loan. However, the corresponding depreciation expense related to the IPP is recorded over the term of the Power Purchase Agreement (PPA). The term of the loan being shorter than the term of the PPA results in higher Net Assets in the Consolidated Financial Statements of the Group. 

In accordance with the require­ments of IAS 36, the Company has carried out an assessment of the re­coverable amount the thermal energy assets for the purpose of Standalone and Consolidated Financial State­ments. Due to the specific account­ing treatment for IPPs, as mentioned above, the Net Assets of thermal en­ergy assets in the Consolidated Finan­cial Statements of the Group are high­er than their recoverable amounts. Accordingly, an accounting impact of PKR 30 billion (Owners’ Share: PKR 13 billion) has been recognized in the Consolidated Financial State­ments for the year ended December 31, 2023. In case of Standalone Finan­cial Statements of the Company for the year ended December 31, 2023, no impact has been recognized as the recoverable amount of thermal ener­gy assets is significantly higher than their carrying amount.