Engro Focuses Earnings on Asset Growth, Dividend Unlikely | Summary Excerpt from Directors Report Q3Sep2025

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Engro Holdings’ Q3 directors’ report indicates the Board’s focus on strengthening investments and portfolio growth. Earnings are being retained to fund the towers transaction, suggesting that near-term cash dividends are unlikely as priority remains on long-term value creation.

Engro Holdings – Asset Developments Summary

Fertilizers:

The fertilizer segment remains the cornerstone of Engro’s portfolio. Although recent demand was affected by weaker farmer economics and flood damage, the business continues to focus on efficiency and customer engagement. Looking ahead, improved farmer economics — supported by higher wheat prices, sustained cotton price parity, and stronger irrigation prospects from heavy monsoon inflows — are expected to boost performance. These trends reinforce Engro’s long-term confidence in this business.

Polymers:
Operating under pressure from low margins, high gas costs, and subdued demand, the polymer business continues to emphasize cashflow optimization, cost reduction, and balance sheet strength. While the near-term environment remains challenging, these measures aim to position the business for compounded returns once energy prices and global demand stabilize.

Telecom Infrastructure (Towers):
Engro’s consolidation into a 15,000-tower portfolio marks a major strategic investment. Immediate priorities include integration, efficiency gains, improved customer solutions, and profitable network expansion. Despite higher taxes challenging sector investment, rising data demand tied to Pakistan’s digital growth underpins the business’s long-term outlook. The tower portfolio is set to become a reliable source of sustained cashflows.

Energy:
The energy assets remain stable and resilient.

  • EPTL: Delivered 2,789 GWh versus 2,573 GWh last year; one of the lowest-cost baseload plants. Post-2029, after debt repayments, it will become an even cheaper power source.

  • EPQL: Dispatched 570 GWh (down from 649 GWh); under evaluation for monetization.

  • SECMC: Phase III expansion progressing, strengthening returns and energy security.
    Overall, the energy portfolio continues to provide steady cashflows while aligning with national needs and shareholder priorities.

Foods:
Despite policy distortions — particularly sales tax on formal dairy and weak enforcement against the informal sector — the business remains operationally disciplined and resilient. Engro sees strong long-term potential as sector formalization drives productivity, demand, and export capacity.

Terminals:
Engro’s terminal businesses remain vital to Pakistan’s gas and chemical supply chains, handling about 15% of national gas supply. They deliver stable cashflows and remain strategically important. However, higher minimum taxes have added financial strain. The focus remains on operational excellence while engaging with stakeholders to preserve sectoral viability.

Trading:
Engro Eximp FZE continues to expand, showing robust topline growth driven by higher volumes. Beyond financial gains, it enhances Engro’s global presence and portfolio diversification. Together with the terminals, trading operations strengthen the Group’s stability and international reach.


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