ENGRO Corporation (ENGRO): 2Q2019 EPS Rs4.97, up 51% YoY (Result below expectations)
- Engro Corporation Limited (ENGRO) posted profit of Rs4.97/share, up 51% YoY due to higher than expected taxation at Rs4.8bn taking effective tax rate at 50% Vs 32% in 2Q2018 owing to deferred tax charges recognized by Engro Fertilizer (EFERT), we believe.
- Along with the result company announced cash dividend of Rs8/share, taking cumulative dividend during 1H2019 to Rs15/share.
- Among its subsidiaries, Engro Polymers (EPCL) earnings declined by 66% YoY to Rs452mn due to higher operating expenses amid change in accounting treatment. Further hike in policy rate during outgoing quarter fueled up the finance cost +226% YoY which kept earning depressed.
- Similarly, Profit from fertilizer business of the company fell by 2.5% YoY due higher operating expenses and finance cost.
- Unconsolidated admin expenses continued its rising trend (YoY) during 2Q2019, the company witnessed 168% YoY growth on back of expenditures being incurred on creation of ‘Engro Leadership Academy’ (for training of its employees) and other feasibilities related expenses.
- Key risks to ENGRO include 1) poor crop season, 2) scarcity of water for sowing season 3) volatility in polymer margins and 4) change in regulatory structure in energy division as key risks for the holding company.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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