Engro Fertilizers Limited (EFERT) reported a consolidated profit after tax of Rs. 7.119 billion for the first half of calendar year 2026 (H1CY26), down 16 percent from Rs. 8.464 billion in the corresponding period last year, as weaker fertilizer demand weighed on earnings.
The company also reduced its quarterly cash dividend to Rs. 1.75 per share, a 42 percent decline from the Rs. 3.00 per share distributed in the same quarter last year.
For the quarter ended June 30, 2026, EFERT posted a consolidated profit of Rs. 3.8 billion (earnings per share: Rs. 2.8), compared with Rs. 5.6 billion (EPS: Rs. 4.2) in the same period of 2025, reflecting a 32 percent year-on-year decline.
Net sales for the quarter fell 34 percent to Rs. 33.1 billion, primarily due to significantly lower fertilizer demand. Urea offtake declined 40 percent, while DAP sales plunged 69 percent compared with a year earlier.
Despite the drop in volumes, the company’s gross margin improved to 35.8 percent from 31.4 percent a year ago, supported by stronger product pricing and a higher contribution from urea sales.
Operating expenses increased slightly by 2 percent year-on-year to Rs. 5.2 billion, mainly because higher fuel costs lifted distribution expenses despite lower sales volumes.
Meanwhile, other income jumped 61 percent to Rs. 2.4 billion, largely due to a Rs. 1.8 billion one-off remeasurement gain on the Sindh Infrastructure Development Cess (SIDC) provision following its likely settlement with the Government of Sindh.
Finance costs rose 6 percent to Rs. 1.9 billion as the company relied on higher borrowings to finance working capital requirements and ongoing capital expenditure. The effective tax rate for the quarter stood at 42 percent, compared with 40 percent in the same period last year.
Analysts noted that the one-time SIDC gain helped cushion earnings during the quarter. Excluding that non-recurring benefit, profitability broadly matched market expectations. They continue to expect fertilizer demand to recover as farm economics improve and inventory levels normalize over the coming months.
