Engro Fertilizers Limited (EFERT), a fully owned subsidiary of Engro Corporation Limited, has announced a profit after tax (PAT) of Rs28.26 billion for the fiscal year ended December 31, 2024. This marks an 8% increase compared to the PAT of Rs26.19 billion recorded in 2023. The results, disclosed on Monday through the company’s consolidated financial statements at the Pakistan Stock Exchange (PSX), reflect a solid performance in a challenging market environment.
The company’s earnings per share (EPS) for 2024 stood at Rs21.16, up from Rs19.61 in the previous year. This growth is attributed to effective cost optimization strategies and efficient plant management, which helped improve operational efficiency despite rising costs. The increase in profitability comes as the company continues to strengthen its position in the competitive fertilizer market.
In addition to the positive financial results, Engro Fertilizers’ Board of Directors (BoD), in a meeting held on February 7, 2025, announced a final cash dividend of Rs8 per share, which equates to 80%. This is in addition to an interim cash dividend of Rs13.5 per share (135%) that had already been paid during the year. The company’s dividend policy demonstrates its commitment to providing value to shareholders, reflecting the underlying strength of its operations and cash flow generation.
On a consolidated basis, Engro Fertilizers reported a nearly 15% year-on-year (YoY) increase in revenue, reaching Rs256.68 billion for 2024, compared to Rs223.7 billion in 2023. The revenue boost is largely attributed to an increase in urea prices, which significantly contributed to the company’s top-line growth. The performance also highlights the resilience of the company in navigating market fluctuations and its ability to capitalize on favorable market conditions.
Despite the growth in revenue, the company’s gross profit showed a slight dip, falling marginally to Rs72.28 billion in 2024 from Rs72.3 billion in the previous year. The decline in gross profit was driven by a 22% rise in the cost of sales, a factor that affected the overall profitability. Consequently, the profit margin decreased to 28.2% in 2024, down from 32.3% in 2023. The increase in operational costs, primarily related to raw materials and energy prices, had a compressing effect on margins.
EFERT’s selling and administrative expenses saw a significant rise, climbing by 28% to Rs22.61 billion in 2024, compared to Rs17.63 billion in 2023. The higher spending was largely attributed to inflationary pressures and increased operational activities as the company worked to expand its market reach and improve its service offerings.
In another positive development, Engro Fertilizers recorded a gain of Rs1.2 billion under the head of allowance on subsidy receivable from the government in 2024, contrasting with a loss of Rs2.44 billion in 2023. This improvement was a result of better alignment with government subsidy schemes, which helped offset some of the pressure on costs and provided a cushion against the overall rise in expenses.
While the company’s profit before tax (PBT) of Rs45.15 billion for 2024 represents a decrease of 9% compared to the previous year, Engro Fertilizers has managed to maintain a solid financial position despite various challenges. The decline in PBT highlights the tough operating environment, including higher costs and competitive pressures in the fertilizer sector.
Looking ahead, Engro Fertilizers remains committed to sustaining its growth trajectory by focusing on enhancing operational efficiency, optimizing costs, and continuing to benefit from the rise in agricultural demand. The company’s robust financial performance in 2024 serves as a strong foundation for future growth, as it seeks to maintain its leadership position in the fertilizer industry while delivering value to shareholders.