KARACHI, Feb 15: Engro Corporation announced profit after tax (PAT) at Rs1.3 billion for the year 2012, representing earning per share (eps) at Rs2.61. The earnings were 83 per cent lower than earlier year’s PAT at Rs8.1billion and eps at Rs15.77.

The Board, which announced the results on Friday, did not declare a payout and none was expected by the market. The price of Engro stock fell by 84 paisa to Rs94.44 on Friday, with trading seen in 12 million shares.

On account of adverse operational environment faced by the company's flag ship, the urea business continued to negatively affect company’s bottom-line, analysts at stock brokerage Topline Securities commented.

However, loss of Rs5.70 per share from Engro fertiliser was partially offset by Rs4.5 per share earnings contributed by the key subsidiary, Engro Foods.

Engro Corporation’s revenue grew by 9 per cent over the earlier year to Rs125.2bn in 2012, mainly driven by 35 per cent growth in sales of Engro Foods, which accounted for almost a third of the conglomerate’s sales in CY12, compared to 26 percentrevenue contribution the previous year.

The decline in urea sales was on account of non-availability of gas from Sui Northern Gas pipelines and supply influx of subsidized imported urea.

Analysts at BMA Capital Management affirmed that the Engro Corporation results were above expectations, primarily because the company booked a one time gain on reversal of liability on disposal of discontinued operations, amounting to Rs252 million.

The major reason for steep decline in Engro Corporation earnings was attributed to 28 per cent increase in finance costs to Rs15.8bn, 68 per cent of which were attributable to Engro Fertiliser.

The fertiliser subsidiary could not operate its new highly leveraged plant for over eight months in CY12, which led to its operating earnings falling drastically short of financial charges.

The fourth quarter (4QCY12) marked a turnaround in the company’s profitability where Engro Corporation earned Rs1.8 billion, swinging the bottom-line back into profitability from a loss of Rs443 million in the nine months of CY12.