KARACHI: The Engro Corporation announced a 14 per cent increase in net profit to Rs18.52 billion in 2021 against Rs16.30 billion in 2020, translating into the earnings per share of Rs32.14 in 2021, compared with Rs28.29 during the previous year.
During 2021, Engro Corporation’s standalone revenue exhibited a substantial growth of 38 per cent to Rs20.68 billion, compared with Rs15 billion in 2020. The higher revenue was primarily due to higher dividends received from Engro Polymer and Chemicals Limited (EPCL) and Engro Fertilizers Limited (EFERT), which in turn were driven by strong underlying business performance.
On a consolidated basis, Engro Corporation’s revenue grew 25 per cent to Rs311.59 billion in 2021 from Rs248.82 billion in 2020. The net profit of the company recorded a growth of 19 per cent to Rs52.61 billion in 2021, compared with Rs44.11 billion in 2020, translating to an EPS of Rs48.50 per share.
Engro Corporation announced a final cash dividend of Rs1/share for the year. This is in addition to the interim dividend of Rs24/share already declared during the financial year.
The domestic market witnessed a strong agricultural sector performance during 2021. Resultantly, EFERT achieved a historical milestone of highest ever urea sales of 2.295 million tonnes in 2021 against 2.057 million tonnes in 2020. Due to the turnaround of the Base and Enven plant, urea production during the year reduced from 2.264 million tonnes in 2020 to 2.105 million tonnes in 2021.
Phosphate sales stood at 366,000 tonnes whereby a steep rise in the international prices dampened the local demand. Overall, EFERT achieved its highest ever profit of Rs21.09 billion in 2021, demonstrating a growth of 16 per cent from Rs18.13 billion in 2020.
EPCL announced commercial operations of its new PVC plant and VCM debottlenecking during March and June 2021, respectively. PVC capacity increased 100,000 tonnes to 295,000 tonnes per annum while VCM capacity increased 50,000 tonnes to 245,000 tonnes per annum.
These initiatives enabled EPCL to achieve the record domestic PVC sales of 207,000 tonnes alongside highest ever PVC exports of 19,000 tonnes translating into an export value of $28 million.
During the year, international PVC prices increased significantly due to supply disruptions, however, supplies to the domestic PVC downstream market continued uninterrupted due to EPCL’s steady production.
During the year, Engro Corporation formed a dedicated platform for connectivity and telecom infrastructure initiatives by the name of Engro Connect (Pvt) Limited. EConnect is a wholly owned subsidiary of Engro and now holds complete ownership of Engro Enfrashare (Pvt) Limited, which is Pakistan’s largest independent telecom tower company.
Enfrashare continued to expand its national footprint and achieved a scale of 2,246 operational B2S towers with a 1.1x tenancy ratio while catering to all four mobile network operators in Pakistan.
Enfrashare built over 75 per cent of the total new B2S towers that were deployed in the country during the year 2021. This increase in the portfolio led to a growth of 3x in the revenue in comparison with the last year. The business has secured orders to reach a scale of 3,300 plus sites by the end of 2022.
FrieslandCampina Engro Pakistan Limited (FCEPL) demonstrated a topline growth of 18 per cent, recording sales of Rs52.09 billion, as compared with Rs44.16 billion during 2020. The gross margin increased to 16 per cent from 12 per cent last year, translating into an increase in the net profit from Rs0.18 billion in 2020 to Rs1.80 billion in 2021.
The business demonstrated an overall increase of 10x in the profitability driven by cost saving initiatives, leveraging e-commerce channels, improved reach and route to markets, increased marketing spend and market penetration to enhance brand equity.
Engro Eximp Agriproducts (EEAP) surpassed industry growth of 16 per cent in the brown rice segment and recorded 21 per cent growth versus last year. As a key contributor to foreign reserves, the business continued its focus towards exports, generating a revenue of $18.8 million through international sale of 24,000 tonnes rice against 28,000 tonnes during the previous year.
Given the supply chain constraints in the international market, the business pivoted its supply to the local market and increased the domestic sales 39 per cent to 13,000 tonnes during 2021.
Sindh Engro Coal Mining Company (SECMC) supplied 3.8 million tonnes of coal to Engro Powergen Thar Limited (EPTL) during the year. EPTL achieved an availability of 83 per cent with a load factor of 80 per cent and dispatched 4,225GWh to the national grid during the year.
The Phase II expansion of SECMC’s mine to 7.6 million tonnes per annum is underway with 71 per cent of the overburden removed from the site. The Phase III expansion of the mine to 12.2 million tonnes per annum has also been approved during the year.
Engro Powergen Qadirpur Limited (EPQL) plant dispatched a net electrical output of 851 GWh to the national grid with a load factor of 46 per cent compared with 30 per cent last year due to higher offtake from the Power Purchaser.
EPQL’s revenue increased 26 per cent due to higher dispatch and load factor which was offset by the absence of a long-term debt servicing component.
Engro Elengy Terminal (Pvt) Limited (EETL) successfully completed Pakistan’s first-ever Dry-Docking activity of FSRU Exquisite at Qatar dockyard with minimum outage during the switchover between the two FSRUs. During the Dry-Docking period, FSRU Sequoia enabled gas supply continuity ensuring national energy security.
The liquefied natural gas (LNG) terminal handled 72 vessels during 2021, in line with last year, delivering 216.2bcf regasified LNG into the Sui Southern network with an availability factor of 96.5 per cent.
The terminal contributed 15 per cent towards Pakistan’s total gas supply during the year. Profitability of both the LNG and chemical storage terminals business remained stable during 2021.
