Karachi: Pakistan’s renowned conglomerate Engro Corporation seems in trouble as no good news has been reported in the past few weeks including the departure of its CEO and President Asad Umar, the resignation of CEO Engro Fertilizer Khalid Mansoor and now its lost of profit as well.
The company reported to show loss of Rs 649 million (attributable to equity holders of the holding company) as compared to a net profit of Rs 2.054 billion in the same period last year.
Engro Corporation consolidated revenue stood at Rs. 22.9 billion for the first quarter 2012 as compared to Rs 21.8 billion in the same period last year.
The board of directors of Engro Corporation Limited on Friday announced the financial results for the first quarter ended, March 31, 2012.
The loss was primarily due to high urea inventories with manufacturers (due to excessive urea imports) and the company expects to realize profits in the subsequent quarters.
In the quarter, the sales of urea for the fertilizer business declined as a result of a long supply situation created by the arrival of imported urea, higher prices and poor farm economics. The fertilizers business registered a decline in market share to 8% as opposed to 20% in the same period last year. The loss is a direct result of lower sales volumes and high depreciation & financial costs due to the capitalization of Enven plant.
However Engro Foods sustained the corporation with healthy sales and its generated revenues, which is in fact potential business portfolio of the company to make good money in future.
The foods business is also expected to drive growth in all its business segments expecting to deliver strong performance and bolder innovations to delight its customers in 2012, the official statement also asserted.
The foods business turnover grew by 54% to Rs 9.9 billion in 2012 as compared to Rs. 6.4 billion for the corresponding period last year. In addition, the company’s investment in the Halal Foods business in Canada, Al Safa, also achieved sizable sales revenue of Canadian $ 2.5 million during the first quarter of 2012.
The petrochemicals business saw an increase in domestic PVC sales to 36 Ktons in Q1 2012, as compared to 29 Ktons in the corresponding period last year. The business, however, posted a net profit for the three months ended March 31, 2012, compared to a loss in Q1 2011. The higher profitability was mainly attributable to higher VCM production, increased sales and insurance claim booked as other income.
During the first quarter, the Engro Qadirpur Powergen plant dispatched a total of 421 GWh to the national grid and demonstrated a billable availability of 100.4%. The plant also went through its second major maintenance exercise which was completed successfully before time.
With regards to the future outlook for its businesses the company expects the gas supply scenario to remain volatile with fertilizer plants on the SNGPL network expected to continue facing supply outages and disruptions. However, much of the financial impact of these outages has already been mitigated through urea price increase last year.
The company expects to consolidate performance across the subsidiaries and continue working with stakeholders to pursue growth and value creation across the board, official statement said.