Engro Fertilizers Limited (PSX: EFERT) has announced its financial results for the calendar year 2024 (CY24), reporting a consolidated profit after tax (PAT) of Rs. 28,260 million, translating to an earnings per share (EPS) of Rs. 21.16. This marks an 8 percent year-on-year (YoY) increase compared to Rs. 26,191 million (EPS: Rs. 19.61) recorded in CY23.

However, the company’s consolidated earnings for the fourth quarter of CY24 (4QCY24) stood at Rs. 10,280 million (EPS: Rs. 7.70), reflecting an 8 percent YoY decline. Alongside the financial results, the company declared a final cash dividend of Rs. 8.00 per share, bringing the total dividend for CY24 to Rs. 21.50 per share.

Engro Fertilizers’ net sales for CY24 reached Rs. 256,675 million, representing a 15 percent YoY growth. This increase was driven by a 39 percent and 9 percent YoY rise in urea and DAP prices, respectively, coupled with a 10 percent YoY increase in DAP offtake. However, urea sales declined by 13 percent YoY, primarily due to a 54-day closure of the EnVen plant for maintenance. On a quarterly basis, the company’s topline for 4QCY24 rose by 13 percent YoY to Rs. 84,830 million, supported by a 17 percent jump in urea offtake, although DAP sales fell by 5 percent YoY.

Gross margins for CY24 stood at 28.2 percent, down from 32.3 percent in CY23, reflecting a decline of 378 basis points. This contraction was attributed to higher gas prices. In 4QCY24, gross margins settled at 34.9 percent. The company’s distribution costs for CY24 surged by 37 percent YoY to Rs. 17,855 million, while in 4QCY24, distribution costs doubled YoY due to higher volumetric sales.

Other income for CY24 declined by 21 percent YoY to Rs. 2,925 million, primarily due to reduced income from cash and cash balances. In 4QCY24, other income dropped sharply by 72 percent YoY to Rs. 511 million, attributed to lower interest income. Meanwhile, the company’s finance costs for CY24 doubled YoY to Rs. 4,129 million, driven by higher interest rates. In 4QCY24, finance costs increased fivefold YoY to Rs. 1,467 million due to higher borrowings.

The company reported an effective taxation rate of 38 percent in 4QCY24, compared to 44 percent in the same period last year. Despite challenges such as higher gas prices, increased distribution costs, and rising finance costs, Engro Fertilizers Limited managed to deliver a solid performance for CY24, supported by higher urea and DAP prices.