Engro Holdings posts Rs73.3bn profit on one-off gain

Company reports stable underlying business but PAT inflated by impairment reversal on thermal assets.

Engro Holdings has reported a consolidated profit after tax (PAT) of Rs73.3 billion for the first half of 2025, with the owner’s share standing at Rs35.6 billion and earnings per share (EPS) at Rs29.54, compared to Rs8.09 in the same period last year. The sharp rise, however, is largely due to a one-off reversal of impairment on thermal assets. Excluding this, the owner’s PAT stands at Rs9.0 billion, reflecting a more accurate picture of operational performance.

On a standalone basis, Engro Holdings posted a PAT of Rs67 million compared to Rs4.2 billion last year, translating into an EPS of Rs0.06 against Rs8.68 previously. The decline was attributed to the transfer of income-generating investments to DH Partners under the Scheme of Arrangement, along with reduced dividends from Engro Corporation, which is conserving cash for the ongoing Deodar Towers acquisition.

The company’s latest results reflect structural changes stemming from major corporate events. Firstly, the creation of Engro Holdings has significantly altered the ownership structure. For 2025, the owner’s PAT reflects 100 percent of Engro Corporation’s earnings versus 39.97 percent last year. At the same time, 723 million new shares were issued, expanding the share base from 481 million to 1.204 billion, affecting EPS comparisons.Engro Fertilizers Earnings Down 63% in 1Q2025

Secondly, thermal energy assets previously classified as discontinued operations have been reclassified as continuing operations after the termination of the deal. This resulted in the reversal of previously booked impairments, adding Rs26.6 billion to consolidated profits attributable to owners.

Thirdly, the acquisition of Deodar Towers has begun to impact financials. The assets and liabilities were recorded at provisional fair values of Rs220.6 billion and Rs167.7 billion respectively. Deodar’s 28-day results were consolidated into Engro Holdings’ H1 2025 accounts, underscoring the strategic importance of this acquisition.

The Board of Directors did not declare an interim dividend, as the company continues to prioritize capital allocation for the Deodar Towers transaction. Management highlighted that this acquisition represents one of Engro’s most significant investments, with expectations of resilient cashflows and long-term shareholder value creation.

Industry analysts note that while headline profits have surged, the core business performance remains relatively steady once extraordinary items are stripped out. The results also underline Engro Holdings’ strategic shift, with long-term growth tied closely to new asset acquisitions and a transformed corporate structure.

Going forward, investors are likely to focus on how effectively the company integrates Deodar Towers and sustains cashflows in the absence of interim dividends. With structural changes reshaping the group’s earnings profile, Engro Holdings’ performance in the coming quarters will be closely watched as a test of its ability to deliver sustainable value beyond one-off accounting adjustments.