Engro Announces Final Cash Dividend Of Rs 4 Per Share

KARACHI, (UrduPoint / Pakistan Point News - 18th Feb, 2017 ) : The Engro Corporation has announced a final cash dividend of Rs four per share for the year ended December 31, 2016, says an announcement here on Saturday.

It said that Engro Corporation today reported year-end results and posted a consolidated profit-after-tax (attributable to owners) of PKR 69,107 million compared to PKR 13,784 million during 2015.

Engro Corporation finished 2016 with revenue of PKR 157,208 millions. PKR 181,652 million in 2015 representing a decline of 13%, mainly on account of intense competition in the dairy sector coupled with lower Urea off-take at subsidized prices due to poor agronomics.

The Company also announced a final cash dividend of PKR 4/share for the year ended December 31, 2016, aggregating to Rs.24/share for the full year. The increase in profit is attributable to one-off gain amounting to PKR 58,680 million, recognized in accordance with International Financial Reporting Standards, due to partial divesture of equity stake in Engro Foods.

`I'm pleased to report Engro Corporation's results have come in at the higher end of our expectations' said Ghias Khan President & CEO of Engro Corporation. `Our ability to consistently execute means we made the most of a year in which we faced some unexpected regulatory headwinds.

Decisive actions against our strategic priorities have resulted in a strong foundation for future growth and competitiveness. For 2017 we remain focused on adding shareholder value through a combination of internal alignments and external initiatives' he remarked.

Engro Fertilizers' decline in sales is mainly on account of lower urea off-take at subsidized prices. Engro Fertilizers' profitability was similarly impacted by lower urea off-take in the first half of 2016, and market expectation of price reduction through subsidy.

Urea demand improved significantly in second half after subsidy announcement by the Government. Engro Fertilizers continued to excel operationally and operated both of its plants with full gas availability.

Engro Foods' sales declined due to a challenging competitive environment in the dairy sector.

This also affected Engro Foods' profitability this year. Changes in taxation regime also resulted in an increase in cost of sales affecting profitability.

Engro Elengy Trminal delivered an incredibly strong year as it hit peak operational capability with an average utilization of 99.4%. This meant handling 44 cargoes during 2016 versus just 17 cargoes in 2015.

The petrochemicals business (Engro Polymer) also excelled operationally with its highest ever production and strong volumetric growth in sales. Cost efficiency measures instituted this year, while maintaining focus on high HSE standards, translated into profits of PKR 660 million for the year as opposed to a loss of PKR 644 million during 2015.

Within Engro's energy assets, the Qadirpurplant performed well as per guidance.In a major milestone for Thar, the business was able to satisfy all conditions under financing agreements and achieved financial close for the Thar Coal Power Project on April 4, 2016.

The project has made substantial progress on all engineering, procurement and construction (EPC) fronts. Overall project progress is on course and development initiatives for local communities are underway.

We expect to have commercial production from September 2019. Similarly, SECMC achieved financial close on April 4, 2016 as a result of which notice to commence was issued to EPCcontractors (China Machinery Engineering Corporation and China-East Resources Import & ExportCompany)who have now been mobilized on the site.

Round the clock overburden materials removal began in May and current progress is ahead of schedule with ~15 M BCM (billion cubic meters) of overburden removed as of Dec 31, 2016. This is in addition to the 4 M BCM that was removed prior to financial close.

Major milestones have also been achieved on the dewatering infrastructure projects related to the mine. Drilling of all 27 wells has been completed which has enabled SECMC to start dewatering of 3 aquifers by first quarter of 2017.