Karachi, February 09, 2023 (PPI-OT): Fertilizer – Engro Fertilizer Limited

Earnings: Engro Fertilizer Limited (EFERT) announced it 4QCY22 result. The Company reported 4QCY22
consolidated earnings of PKR 6.4bn (EPS PKR 4.80), up by +4%y/y compared to PKR 6.2bn (EPS PKR 4.62)
in the similar period last year. This brings total CY22 profitability to PKR 16.0bn (EPS PKR 11.98), down by
24%y/y compared to PKR 21.1bn (EPS PKR 15.8) in the same period last year.

Dividend/Payout: The Company announced cash dividend of PKR 5.0/share along with the result
bringing total cash payout for CY22 to PKR 13.5/share.

Operating Performance: During 4QCY22, EFERT reported +16%y/y incline in revenue on the back of
higher Urea and DAP prices and DAP sales despite drop in Urea offtake. However, gross margins declined
to 22.9% during 4QCY22 compared to 32.9% in the same period last year. Finance cost increased by
+2.9xy/y to PKR 1.0bn during 4QCY22 likely owing to higher mark-up expense amid elevated debt levels
and higher interest rates. Earnings growth was primarily driven by tax reversal of PKR 0.9bn. In the
preceding quarter effective tax rate stood at 33% (4QCY21: 25%) bringing total effective tax rate for CY22
to 40% against 29% in CY21.