KARACHI: Engro Corporation Ltd’s profit after tax (PAT) fell by six per cent to Rs7.80 billion in 2014 from Rs8.32bn in the previous year. Earnings per share (eps) dropped to Rs13.59 from Rs15.29.

The corporation’s board announced final cash dividend at Rs4 per share, taking the total payout for the year to Rs6 per share. The figures announced on Wednesday beat analysts’ expectations of eps at Rs12.50 and dividend at Rs2 per share.

Deducting the profit attributable to non-controlling interest amounting to Rs794 million for 2014 and Rs507m the year earlier, the profit attributable to equity holders amounted to Rs7.01bn for 2014, down 10pc from Rs7.82bn in 2013.

Analyst Muhammad Tahir Saeed at Topline Securities commented that the revenue of the company increased by 13pc to Rs175.9bn in 2014 compared to Rs155.4bn. Cost of sales surged significantly by 22pc to Rs139.7bn compared to Rs114.8bn last year mainly due to higher gas prices. During 2014, Gas Infrastructure Development Cess (GIDC) was increased on feed and fuel stock.

MATERIAL DISCLOSURE: Under the material disclosure requirements, the board stated that it had resolved (subject to obtaining approvals) to sell Engro Corporation’s entire shareholding in its wholly owned subsidiary Engro EXIMP (Pvt) Ltd — including its 100pc held UAE-based subsidiary Engro EXIMP FZE — to associated entity Engro Fertilisers Ltd for a consideration of Rs4.4bn.

Engro Corporation will also be purchasing the entire issued share capital of Engro EXIMP AgriProducts Ltd — a wholly owned subsidiary of EXIMP — from EXIMP for a consideration of Rs4.4bn, to make it a direct subsidiary of the company.

The corporation will also be seeking approval of its shareholders to subscribe to Rs2.25bn worth of preference shares to be issued by its subsidiary, Engro Polymer and Chemicals Ltd.

The preference shares will carry a dividend of 14pc per year. Due to various legal and regulatory approvals required in issuing preference shares and as a precaution against any problems that may arise in their issuance, the company is also seeking approvals to lend to EPolymer a sum of up to Rs4bn as a long-term subordinated loan.

It is, however, not the intention to invest more than a maximum of Rs4bn by way of combination of the preference shares investment and loans.

Published in Dawn, February 19th, 2015

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