The effective tax rate for the quarter was 20%, a significant decrease from the 46% tax rate in the same quarter last year.
Over the last four quarters, ENGRO earned net income of Rs. 41.6 per share and declared a cash dividend of Rs. 25 per share. The company’s net income for the last four quarters is 27.5% higher than the total net income from the preceding four quarters.
Engro Corporation (ENGRO) is in advanced discussions with Liberty Power for the potential sale of its stakes in:
Share sale is the planned divestment method.
Accounting Remeasurement: A non-cash adjustment of PKR 13.0 billion was made by ENGRO to its thermal portfolio to address accounting specificities for Pakistani IPPs that can cause discrepancies between reported profitability and actual cash flows during initial project years. This adjustment aims to rectify this disparity and reflect fair value.
**Financial Implications: **
The PKR 13.0 billion adjustment is non-cash. The potential sale to Liberty Power is expected to result in a one-off gain for ENGRO, considering the anticipated transaction value exceeding the book value of the thermal portfolio.
Engro Corporation (PSX: ENGRO) announced Financial Results for the Year End 31 Dec 2023 on Feb 26, 2024.
CASH DIVIDEND: A Final Cash Dividend for the year ended December 31, 2023 @ Rs. 2.00 per share i.e. 20%. This is in addition to the interim cash dividends already paid at Rs. 46.00 per share i.e. 460%
Engro reported unconsolidated earnings of Rs. 17.6bn compared to Rs. 21.2bn in FY22, a decline of 17%. This was primarily attributed to additional super tax on dividends and lower interest income.
ENGRO further disclosed:
Divestment Plans: Engro Corporation is considering divesting its thermal energy assets (stakes in EPQL, EPTL, and SECMC) through a share sale process. Discussions are ongoing with Liberty Mills Limited and other relevant parties.
Accounting Impact Due to IPP Rules: Specific accounting exemptions (outlined in SECP SRO 986) for Independent Power Producers (IPPs) create a disparity between the higher Net Assets reported in Engro's Consolidated Financial Statements and the actual recoverable amount of its thermal assets.
Remeasurement: To address this, Engro has recognized an accounting impact of Rs. 29,950 million (Owners’ Share: Rs. 13,295 million) in its consolidated financial statements for 2023. This does not affect the Standalone Financial Statements, where recoverable value remains higher than carrying amount.
