Topline Securities Limited - Engro (ENGRO) Engro Corporation (ENGRO): 2Q2020 EPS at Rs9.97, up 105% YoY (in line with industry expectations)

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Topline Securities Limited

Sunny Kummar

EUR 30.00 For Business Accounts Only

Engro Corporation (ENGRO): 2Q2020 EPS at Rs9.97, up 105% YoY (in line with industry expectations)

Engro Corporation Limited (ENGRO) announced its 2Q2020 financial result, where the company booked a consolidated profit of Rs5,742mn (EPS: Rs9.97) compared to Rs2,799mn (EPS: Rs4.86) in 2Q2019.
It takes 1H2020 earnings to Rs9,059mn (EPS: Rs15.73), up by 33% YoY.
Along with the result, the company announced a cash dividend of Rs8/share, taking cumulative dividend during 1H2020 to Rs14/share.
Among the subsidiaries, Engro Fertilizer Limited (EFERT) earnings were up by 22% YoY to Rs3,886mn during 2Q2020 due to higher Urea sales by 52% YoY to 696k tons.
However, Engro Polymer (EPCL) earnings were down 93% YoY to Rs30mn compared to Rs452mn in 2Q2019 due to decline in 1) PVC and Caustic sales amid country wide lockdown due to COVID-19 outbreak and 2) decline in gross margins by 12.1ppts to 9.8%.
Other income decreased by 12% YoY to Rs3,576mn, while Other operating expenses increased by 13% YoY to Rs2,051mn.

Income from Joint Venture and associates significantly increased by 211% to Rs873mn from Rs280mn amid contribution from Sindh Engro Coal Mining Company (CECMC) and Engro Vopak Terminal.

19/08/2020 2 EN

Underlying

Engro

Engro Corporation is an agri based company. Co.'s core business is the manufacturing, purchasing and marketing of chemical fertilizers and seeds. Co. is engaged in the production of Urea fertilizer in Pakistan which is manufactured at Daharki and marketed under brand name Engro. Co. also maintains a seed business and is marketing imported hybrid and open pollinated seeds of maize and sunflower crop under the brand name of Bemisal. Co. has investments in joint ventures engaged in chemical terminal and storage, PVC resin manufacturing and marketing and Automation and Controls businesses.

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PK0012101017 Pakistan Stock Exchange Pakistan

Provider

Topline Securities Limited

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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Analysts

Sunny Kummar

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