Karachi: Engro Fertilizers Ltd. (EFERT) recently reported its financial results for the year CY24, showing a robust earnings growth of 8% year-on-year, with total earnings reaching Rs28 billion. The company also announced a cash dividend of Rs8 per share, culminating in a total annual dividend of Rs21.5 per share. Despite challenges in the market, EFERT maintains a dividend yield of 13% for the upcoming year.

According to a statement by JS Global, the company's corporate briefing session revealed that the rise in selling expenses was due to an accounting reclassification of approximately Rs2 billion. This reclassification improved gross margins in the fourth quarter of CY24 but also increased selling expenses. Furthermore, inventory pile-ups have led to higher holding costs, impacting overall financial performance.

The ongoing gas disparity remains a concern for EFERT, affecting its competitive position in the fertilizer industry, particularly for SNGP and SSGC-based plants. The company emphasized the importance of regaining market share as a significant challenge moving forward.

EFERT conducted a sensitivity analysis to evaluate the earnings outlook for CY25, focusing on varying market shares. The analysis is part of the company's efforts to adapt to market conditions and optimize its financial strategies.