⚡ Flash Summary
Engro Holdings reported consolidated profit after tax (PAT) of PKR 86.152 billion for the nine months ended September 30, 2025, a significant increase compared to PKR 42.017 million in the previous year. This translates to an EPS of PKR 34.89 versus PKR 13.21 last year. However, much of this increase comes from the reversal of previously recognized impairment related to thermal energy assets. Excluding this one-off event, the core attributable PAT was PKR 15.156 million.
📌 Key Takeaways
- 💰 Consolidated PAT reached PKR 86.152 billion, a substantial increase YoY.
- 📈 EPS surged to PKR 34.89, compared to PKR 13.21 in the prior year.
- 🔄 Reversal of impairment on thermal energy assets significantly impacted PAT.
- 🔥 Core PAT, excluding the one-off reversal, stood at PKR 15.156 million.
- 📉 Standalone PAT decreased to PKR 370 million (EPS of PKR 0.31) vs PKR 6.114 billion (EPS of PKR 12.70) last year, primarily due to the transfer of income-generating investments to DH Partners.
- 🏢 Engro Corporation became a wholly-owned subsidiary; previously, profit attribution was 39.97%.
- ✔️ 723 million new shares were issued, impacting EPS comparisons.
- ♨️ Termination of thermal asset divestment led to reclassification as continuing operations.
- 💸 Reversal of impairment and other adjustments amounted to PKR 54.174 million.
- 📶 Group consolidated Deodar (~10,600 towers), following the transaction with PMCL on June 3, 2025.
- 🌾 Fertilizers performance was impacted by weaker farmer economics and flood-related damage to cropped areas.
- 🧪 Polymers business faced headwinds, including low core delta, rising gas prices, and weaker market demand.
- ⚡ EPTL dispatched a Net Electrical Output of 2,789 GWh, versus 2,573 GWH last year, despite planned maintenance.
- 🚫 No interim dividend was declared for 2025.
- 📊 Assets and Liabilities for Deodar Towers recorded at provisional fair values of PKR 220,612 million and PKR 167,679 million respectively
🎯 Investment Thesis
Given the mixed performance and the impact of one-off gains, a HOLD recommendation is appropriate. The company’s core earnings require further analysis to ascertain the true profitability and future growth prospects. The consolidation of Deodar Towers presents a strategic opportunity but carries integration risks. The target price and time horizon cannot be determined without further due diligence and market information. The company is presenting the appropriate steps to increase long term shareholder value.
Disclaimer: AI-generated analysis. Not financial advice.