Engro Fertilizers’ Profit Down by 63% in Q1 2025

Engro Fertilizers Limited (PSX: EFERT) today unveiled its financial results for the first quarter of calendar year 2025 (1QCY25), posting a consolidated profit after tax (PAT) of Rs. 2,898 million (EPS: Rs. 2.17) against Rs. 7,760 million (EPS: Rs. 5.81) in 1QCY24, down by 63 percent year-on-year. Similarly, the profitability on a quarter-on-quarter basis plunged by 72 percent. Alongside the result, the company announced an interim cash dividend of Rs. 2.25 per share (Rs. 8.00 per share in 1QCY24). Net sales in 1QCY25 clocked in at Rs. 30,286 million, down 59 percent year-on-year. According to Arif Habib Limited, this was due to a 53 percent and 70 percent year-on-year contraction in urea and DAP intake, respectively, attributed to weak agronomics, along with a 36 percent year-on-year decline in DAP price. On a sequential basis, topline plummeted by 64 percent quarter-on-quarter, driven by a 63 percent and 77 percent quarter-on-quarter decline in urea and DAP dispatches, respectively. Gross margins in 1QCY25 reached 35.3 percent compared to 33.1 percent in 1QCY24, owing to higher urea prices. Distribution costs for 1QCY25 stood at Rs. 3,225 million, down 27 percent year-on-year due to lower volumetric sales. Other income dropped by 76 percent year-on-year, settling at Rs. 1,236 million in 1QCY25 due to lower interest income. On a quarter-on-quarter basis, other income increased by 34 percent, benefiting from higher income on cash and bank balances. Finance cost surged 7 times year-on-year, reaching Rs. 1,090 million during 1QCY25, attributed to higher short-term borrowings. However, it declined by 26 percent on a quarter-on-quarter basis due to falling interest rates. The effective tax rate stood at 41 percent in 1QCY25, up from 36 percent in 1QCY24. EFERT’s short-term borrowings as of March 2025 stood at Rs. 28 billion, compared to Rs. 12.5 billion in December 2024. EFERT had cash and bank balances of Rs. 9.2 billion in March 2025, versus Rs. 8.0 billion in December 2024.