Engro first-quarter profit up by Rs 40 million

KARACHI (April 24 2004): The profit of Engro Chemical for the first quarter ended on March 31 recorded an increase of Rs 40 million because of higher sales of urea and other fertilisers.

Engro Chemical Pakistan report for the first quarter ended on March 31, 2004, said on Friday that the overall market demand for urea during the first quarter increased by 19 percent compared to the same period of last year where sale was relatively lower mainly on account of pre-stocking by the dealers in December 2002. The Company's urea sale, however, was up 8 percent to 180,000 tons.

The operating performance of Daharki urea plant remained excellent. The production at 238,000 tons was marginally below first quarter of last year.

The sale of Company manufactured NPK fertiliser was 22,000 tons versus 19,000 tons sold in the first quarter of 2003.

The NPK plant production at 31,000 tons represented record quarter capacity utilisation of 124 percent. During the period, the Company did not transact any business in other purchased fertiliser as against 12,000 tons of imported product sold last year.

The net profit for the first quarter of 2004 was Rs 274 million compared to Rs 234 million recorded in the corresponding period last year. The increase in earnings for the quarter is attributable to improved and profitable performance of NPK and seeds business.

The benefit of higher sales volume achieved in the urea business was completely offset by the net impact of the expiry of the 10-year concessional gas price on expansion feedstock that expired in September, 2003.

The operations at all of joint ventures, Engro Vopak Terminal Ltd, Engro Asahi Polymer & Chemicals Ltd and Innovative Automation & Engineering Ltd were satisfactory.

The first quarter profit after tax at Engro Vopak is expected to be Rs 76 million versus Rs 72 million for the same period last year, while in case of Engro Asahi the expected net profit is Rs 90 million compared to Rs 34 million attained in first quarter 2003.

Innovative Engineering & Automation Ltd, the 51 percent owned joint venture in the knowledge-based sector, is performing well and meeting expectations.

Engro urea production in the second quarter will be affected by about three-week shutdown of the Daharki urea plant for routine maintenance.

Investments made on plant reliability in prior years have enabled the Company to extend the plant run and no shutdown was taken in 2003.

The second quarter outlook for business continues to look promising. On a full year basis, the urea industry is expected to have moderate growth over 2003.

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