KARACHI: The Board of Directors of Engro Corporation Limited on Wednesday announced the financial results for the first quarter ended March 31, 2014.
The company posted a strong comeback with our subsidiaries truly reflecting the story of our growth – with our consolidated revenue closing at PKR 38,354 million and our PAT recording an increase of 12% to PKR 2,001 million.
The company continued to receive additional gas from Mari which enabled two-plant operations leading to increase in production from 296 kt in 1Q 2013 to 456 kt in the current reporting period. Similarly, the sales increased from 298 kt to 451 kt respectively. The company recorded a 53% increase in revenue to PKR 14,896 million during 1Q 2014 vs. same period last year and its profit after tax increased from PKR 646 million in 1Q 2013 to PKR 1,437 million in 1Q 2014.
Having witnessed a difficult preceding year, Engro Foods, during 1Q 2014, maintained its trend in continuously improving performance which started with resolution of distribution issues in 4Q 2013. Revenue increased by 5.7% to PKR 10,168 million vs. PKR 9,624 million in the same period last year, consolidated profit was PKR 190 million vs. PKR 653 million in 1Q 2013 mainly due to lower gross margins in dairy segment.
During last quarter of 2013, our foods business entered into fresh dairy segment on a trial basis. As of March 31, 2014, the Company has operationalized 8 fresh dairy shops under the brand name “Mabrook” on a franchise model. Al-Safa Halal, the Company’s North American subsidiary witnessed a decline in revenue from CAD$2,197K in 1Q 2013 to CAD$1,408K in 1Q 2014 due to increased competition with new entrants pushing shelf-space at retailers. The Company reported a loss after tax of CAD$315K vs. CAD$303K in the same period last year.
Engro Eximp’s wholly owned subsidiary, Engro EXIMP Agriproducts (EEAP), exported 11.6 kt rice, 93 % higher as compared to first quarter of 2013 whereas domestic rice sales stood at 4 kt vs. 5.6 kt in 1Q 2013. Engro EXIMP recorded consolidated revenue of PKR 4,696 million during the period vs. PKR 2,986 million in the first quarter of 2013. The Company’s consolidated loss after tax stood at PKR 352 million during 1Q 2014 as compared to a loss of PKR 241 million in the comparative period due primarily to the impact of the rice business.
Our energy business, Engro Powergen Qadirpur, earned a profit after tax of PKR 585 million in 1Q 2014 vs. PKR 592 million in the same period last year due to higher unbillable outages during the current quarter mainly because of issues at OGDCL’s end. Effective March 31, 2014, Engro Powergen’s (EPL) holding in Sindh Engro Coal Mining Company (SECMC) was reduced to 32 %. However, the management control of the company will remain with Engro.
The petrochemicals produced 33 kt VCM and 33kt PVC during 1Q 2014 vs. 40 kt VCM and 34 kt PVC in the comparative period of 2013. The production was lower due to operational issues at the plant. PVC domestic sales volume during the quarter was 25 kt vs. 34 kt in the comparative period. 4.6 kt PVC was exported as compared to 1.9 kt last year. During the quarter the Company also exported 3 kt of surplus VCM and sold 22 kt of Caustic Soda versus 25 kt last year. During 1Q 2014, the company recorded a revenue of PKR 5,367 million as compared to PKR 5,888 million and a profit after tax of PKR 148 million compared to Rs.263 million during the same period last year.
Our chemical storage and handling business also recorded a revenue of PKR 518 million and profit after tax of PKR 394 million during 1Q 2014 vs. PKR 452 million and PKR 271 million respectively in the first quarter of last year. The company achieved its higher ever score in a customer satisfaction survey by regional office Vopak Middle East.
Significant progress was made on various fronts including contract detailing and negotiations on key terms of contracts with SSGC, PQA and various other stakeholders. Post the quarter end, the Government in its Cabinet meeting approved the LNG project, which is expected to take 11 months to complete post signing of requisite documents.
Changing the Future:
With a strong comeback we remain on our target of resolving the core issues facing the economy. Amongst the various projects, the Thar coal and the LNG initiatives will be trailblazers in providing a growth trajectory for the entire country. The project has already been listed under Pakistan-China Economic Corridor by Ministry of Planning and Reforms and is expected to play a pivotal role in overcoming Pakistan’s energy shortage.
Our foods business has addressed key distribution issues and is set to post a strong comeback as we move ahead with our growth plans. Moreover, we will continue to enhance our presence in the agri/food vertical as we align our business models to serve the future demands of the country. With growth as the company’s foremost priority we remain on the look-out, both domestically and internationally, to venture into new product lines and businesses within our strategic realm.