Staff Report IBD: Engro Fertilizer followed its peers and switched to a loss making regime amid a significant decline in gas supply during the first three months of the current calendar year.
The local conglomerate posted a net loss of Rs1.4 billion against a net profit of Rs1.4 billion during January to March 2012, according to details released on its official website.
The availability of subsidised imported urea and gas shortage has dented sales of urea – the most widely used fertiliser – by approximately 68 per cent, said an official of the company. The core problem of the local conglomerate was the gas shortage which restricted production from its EnVen plant and resulted in a lower share in industry sales of 11 per cent.
In a similar scenario, fellow manufacturer Fauji Fertilizer Bin Qasim also witnessed its worst quarter in more than three years during January to March 2011 by posting a net loss of Rs387 million due to the gas shortage and annual maintenance.
The governments reliance on imports has eased the demand of the commodity for now, however, this will hit the countrys fiscal management hard as the fertilizer import bill reached $848 million during the first seven months of the current financial year against a total of $300 million during same period last year.