Karachi: Engro Holdings Ltd. (ENGROH) announced an 18% year-over-year increase in consolidated earnings for the first half of calendar year 2025, reaching PkR35.6 billion. The rise was primarily attributed to a PkR26.6 billion accounting impact from the reclassification of the energy portfolio to continued operations. However, recurring earnings stood at PkR9.0 billion.
In a strategic move, Engro successfully acquired Deodar Pvt. Ltd., Jazz's tower portfolio, which comprises 10,600 towers. The acquisition, finalized in June 2025, will be funded through retained profits, with debt installments scheduled through December 2026. Management anticipates the tower portfolio will outperform Enfrashare and provide a hedge against currency depreciation and inflation.
The profitability of EFERT, Engro's fertilizer subsidiary, decreased by 10% to PkR8.5 billion due to a 20% drop in urea sales amid weak farm economics. Management foresees continued demand suppression due to agricultural challenges and adverse weather, though they are in talks with authorities to boost exports post-Rabi season.
Engro Polymer and Chemicals Ltd. (EPCL) reported an increased loss of PkR3.2 billion, impacted by lower global commodity prices and rising energy costs. Management is seeking sustainable energy solutions and cost efficiencies amid expectations of continued low commodity prices.
Engro Vopak saw an 8% decline in chemical handling volumes, while LNG terminal operations remained robust. Management predicts a rebound in chemical volumes as demand resumes.
In the energy sector, EPTL's dispatches improved, whereas EPQL's profitability fell by 71% due to a hybrid take-and-pay mechanism. The company is exploring new gas sources for EPQL while planning its divestment to boost shareholder value.
Additionally, EXIMP FZE's revenues rose by 20% to US$239 million, driven by third-party trades, and FCEPL's profitability increased by 5% despite a topline decline, thanks to a better product mix and cost optimization.
Engro maintains a positive outlook, with a 'BUY' recommendation supported by growth in existing segments, telecom expansion, and energy sector reforms. The target price for December 2025 is set at PkR301 per share.