Engro Fertilizers demonstrates 8% profit increase for 2024

Pakistani fertilizer producer Engro Fertilizers disclosed its financial results for the year ending December 31, 2024, via the Pakistan Stock Exchange (PSX) on February 10, 2025. The company reported a consolidated profit after tax (PAT) of PKR 28.260 billion ($101.73 million), an 8% increase from the previous fiscal year’s PKR 26.191 billion ($94.28 million). This growth is primarily attributed to improved operational efficiency and effective plant management.

Despite the annual gain, the company’s fourth-quarter earnings for FY24 declined by 8% year-over-year to PKR 10.280 billion ($37 million). Moreover, a final cash dividend of PKR 8.00 per share was announced, a decrease from PKR 21.50 per share in the previous year.

During 2024, distribution costs surged by 37% to PKR 17.855 billion ($64.2 million). Conversely, other income fell by 21% to PKR 2.925 billion ($10.53 million), largely due to diminished returns on cash balances. The fourth quarter saw a dramatic 72% drop in other income to PKR 511 million ($1.84 million), primarily from decreased interest income as rising interest rates pushed finance costs up to PKR 4.129 billion ($14.87 million) for the year. The last quarter alone recorded a sharp rise in finance costs to PKR 1.467 billion ($5.28 million) due to increased borrowings.

Engro Fertilizer’s net sales in 2024 totaled PKR 256.675 billion ($924.06 million), marking a 15% increase from the previous year, driven by higher urea and DAP prices, alongside increased DAP offtake. Despite this, urea production decreased by 8% to 2.139 million tonnes due to a significant plant turnaround, impacting overall sales volumes.

On a quarterly basis, the company’s top line for FY24 increased by 13% year-over-year to PKR 84.830 billion ($305.42 million), fueled by a 17% rise in urea offtake, although DAP sales decreased by 5%.

The year also saw the launch of “UgAi,” Pakistan’s first integrated agricultural e-commerce platform, aimed at facilitating direct purchases of fertilizers by farmers at official prices. Engro Fertilizer’s contributions to the national exchequer via taxes, duties, and levies amounted to nearly PKR 54.5 billion ($196.32 million), a significant rise from PKR 34.7 billion ($124.94 million) in 2023.

In an Analyst Briefing session on February 14, 2025, Engro Fertilizer’s management discussed the company’s performance and future outlook, highlighting the ongoing challenges of high selling and distribution costs due to increased axle load and warehousing costs for imported urea. Despite these challenges, local urea prices remain lower than those on the international market, with a domestic price of PKR 4,649 per bag ($16.73) compared to PKR 7,125 ($25.65) globally.