Karachi, 11 Oct 2023:Engro Fertilizers Limited (EFERT) and Engro Polymer and Chemicals Limited (EPCL) are set to unveil their financials for 3QCY23, with both companies navigating distinct fiscal landscapes during the quarter according to research reports by AKD Securities Limited. EFERT is poised to report a substantial growth with a 69% YoY increase in Earnings Per Share (EPS), largely attributed to strong offtake numbers and a rise in retail prices across its product lineup. On the flip side, EPCL is expected to encounter a fiscal dip with a 9% QoQ decline in its topline and a contraction in gross margins.

In the upcoming announcement on October 12, 2023, EFERT is expected to declare an EPS of PkR5.28, a robust enhancement propelled by several factors. An increase in Urea and DAP offtake by 35% and 124% QoQ respectively, alongside a surge in average retail prices throughout their product range, has significantly buttressed the fiscal profile of EFERT. Gross margins are anticipated to register at 30.7%, marking a 90bps QoQ and 340bps YoY increase, backed by higher prices and consistent gas costs in the reviewed quarter. Concurrently, the finance cost is predicted to swell by 65% QoQ to PkR1.2bn amid the descent in cash equivalents and amplified short-term borrowings, necessitated to finance working capital in an environment characterized by elevated interest rates. A payout of a dividend of PkR4.75 per share is also projected, culminating the 9MCY23 payout to PkR11.25 per share.

In contrast, EPCL is bracing for a fiscal decrement as it prepares to unveil its 3QCY23 outcomes on October 17th. The company’s PAT is foreseen to settle at PkR1.4bn, translating to an EPS of PkR1.2, a downtick from 2QCY23’s PkR1.6bn (EPS: PkR1.3). This 9% QoQ diminution is largely tethered to a 9% QoQ shrinkage in the topline, forecasted to clock in at PkR17.3bn, juxtaposed against PkR19.0bn in the preceding quarter, underpinned by a decline in PVC prices. Gross margins are envisaged to contract substantially to 21.7%, a slip from 28.6% in 2QCY23 and 29.4% SPLY. The annual contraction primarily stems from a drop in primary core-delta margins (US$401/ton in 3QCY23 vs. US$529/ton SPLY) and an escalation in gas prices, attributed to a blend of rates from RLNG and indigenous gas sources in August and September 2023. The company is also predicted to declare a dividend of PkR1.0 per share for the quarter, escalating the nine-month dividend to PkR3.5 per share.