Karachi, February 7, 2014: The year 2013 was a turnaround year for Engro Fertilizers Limited. The Company managed to return back to profitability after incurring a loss in 2012 and in the process, achieved its highest ever revenue. The sound financial performance was on the back of highest ever production and sales of 1,562 k tons and 1,570 k tons respectively. With improved profitability, the Company decided to go for an IPO, which was a huge success as it was oversubscribed by 4 times.
In 2013 the urea industry grew by 13% after the downturn in 2012 (5,900 K tons in 2013 versus 5,230 K tons in 2012). This growth was mainly attributable to better economics on major crops; weather conditions also remained favorable, casting a positive impact on demand. Increase in off take is also a result of restoration of channel confidence at retail and trade level.
The Government also played an important role by improving gas allocation to the industry. Local production increased by 17%, as a result of which, the Government managed to reduce the subsidy on imported urea.
The prices of locally produced urea remained fairly stable throughout the year. Average price of domestic urea during the year increased by 3.8% only (1% was due to sales tax changes) versus overall inflation of 9%.
Sales revenue for 2013 was Rs. 50,129 million which was higher by 64% as compared to the corresponding period (2012: Rs. 30,627 million).
Profit after tax for the year was Rs. 5,497 million as compared to a loss of Rs. 2,934 million for the same period. This increase in profit after tax is due to higher sales on account of both plants running at around 80% for most part of the second half coupled with increased efficiencies due to conversion of Enven to run on Mari gas.
As a result of above, EPS improved to Rs. 4.66 per share as compared to loss per share of Rs. 2.59 last year.