Engro Fertilizers Limited has announced its financial results for the year ended December 31, 2025. The company reported a profit after tax of Rs22.63 billion, a decline of nearly 20% compared to the Rs28.26 billion earned in the previous year.
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Earnings per share (EPS) settled at Rs16.95, down from Rs21.16 in FY24.
Despite the drop in profit, the company rewarded shareholders with a final cash dividend of Rs4 per share. Combined with earlier interim dividends, the total payout for FY25 stands at Rs15 per share.
What Went Wrong?
The decline in profit was driven by three main factors:
- Lower Sales: Net sales fell 7.6% to Rs237.13 billion. Weaker demand and pricing pressure in the fertilizer sector were the primary reasons.
- Soaring Finance Costs: The company’s interest and borrowing expenses surged by 49.5% to Rs6.17 billion. This was the single biggest hit to the bottom line.
- Lower Other Income: Gains from non-core activities and a government subsidy receivable both dropped significantly (down 12.8% and 48% respectively).
What Went Right?
It was not all bad news. The company managed to:
- Control Production Costs: Cost of sales fell by nearly 11%, which helped keep gross profit stable (up slightly by 0.9%).
- Maintain Strong Payouts: Despite the profit drop, Engro continued to deliver healthy cash dividends to its investors.
The Bottom Line
Engro Fertilizers faced a tough year. While it managed its production costs well, it could not escape the impact of weaker market demand and much higher borrowing costs. The results reflect the broader challenges facing Pakistan’s corporate sector in a high-interest rate environment. However, the company’s continued strong dividend payout signals confidence in its long-term cash flows and stability.
