Lower Fertilizer Demand Weighs On Half-Year Earnings
Engro Fertilizers Limited posted a consolidated net profit of Rs7.12 billion for the six months ended June 30, 2026, down 16% from Rs8.46 billion a year earlier as weaker fertilizer demand weighed on sales volumes.
Earnings per share declined to Rs5.33 from Rs6.34 in the corresponding period of 2025.
The company declared a second interim cash dividend of Rs1.75 per share, taking the total half-year payout to Rs3.75 per share.
Weak Sales Volumes Reduce Revenue
Net sales fell 12% year-on-year to Rs70.85 billion from Rs80.69 billion.
During the second quarter alone, revenue declined 34% to Rs33.07 billion.
Urea offtake in the second quarter stood at 254,000 tonnes, down 41% from a year earlier, while DAP sales plunged 68% to just 18,000 tonnes.
The first half also marked the company’s lowest urea sales in a decade, with total offtake of 537,000 tonnes, leaving inventory elevated at approximately 694,000 tonnes.
Margins Improve Despite Lower Volumes
Gross profit declined 11% to Rs23.56 billion.
Despite weaker sales, gross margins improved to 33% during the first half and reached 35.8% in the second quarter, compared with 31.4% in the same period last year.
The improvement was supported by higher urea prices and effective cost control measures.
A one-off gain of nearly Rs1.8 billion related to the Sindh Infrastructure Development Cess also helped limit the decline in profitability.
Meanwhile, finance costs increased 15% to Rs3.30 billion due to higher borrowings.
Company Maintains Dividend Payout
The Board of Directors approved a second interim cash dividend of Rs1.75 per share (17.5%).
Combined with the earlier interim dividend of Rs2.00 per share, the total H1 dividend stands at Rs3.75 per share, compared with Rs6.50 per share during the same period last year.
Share transfer books will remain closed from August 11 to August 12, 2026.
Shareholders whose names appear on the register by August 10, 2026, will be entitled to receive the dividend.