Despite the challenges faced in 2020, the Company has achieved a historic milestone of highest ever urea production of 2,264 KT as compared to 2,003 KT produced in 2019, an increase of 13% primarily due to better plant utilization supported by minimal outage days and higher gas availability. This was achieved on the back of the unwavering focus on plant efficiency and engineering excellence. In 2020, the Company has also achieved highest ever domestic urea sales of 2,006 KT compared to 1,958 KT in 2019, exhibiting an increase of 2% YoY. As a result, urea market share improved to 33% for the year compared to 32% in 2019. The Phosphates business witnessed a steep resurgence as the Company turned around the business from volumetric sales of 132 KT in 1H to 465 KT on a full year basis. The Company delivered sales revenue of PKR 105.8 Bn showing a decline of 13%, compared to sales revenue of PKR 121.4 Bn in 2019. This decrease is mainly attributed to a decrease in DAP offtakes and reduction in urea prices announced during the year. On consolidated basis, the Company posted a profit after tax of PKR 18,133 Mn showing a growth of 7% compared to 2019, as a result of higher urea volumes, plant efficiency and tax planning.

As the new normal paved its way, it presented numerous social, health and economical challenges and Engro Polymer was no exception to those challenges. A combination of resolve of the leadership team, and commitment of the workforce, Engro Polymer undertook timely measures to ensure health and safety of its people along with continuity of operations. In 2020, EPCL’s revenue decreased by 6% in comparison to 2019, mainly on account of decline in PVC and Caustic volumes by 15% and 27% YoY respectively, primarily due to plant shutdown during lockdown period. The fall in volumes was offset by higher PVC prices which rallied throughout H2 2020 on account of global supply constraints. The Company recorded highest ever profitability in its history clocking at Rs 5,730 million as a result of recovery in volumes in H2 2020, PVC prices and effective cost control. Moreover, Engro Polymer continued to work towards execution of its previously announced projects while continuing its endeavors to identifying new projects and markets.

Coal Mine: Mining operations continued smoothly, and the mine supplied 3.8 million tons of coal to Engro Powergen Thar during the year. The expansion of the mine to 7.6 million tons per annum continued with the contractor mobilizing at site. While the overburden removal process remained minimal in the first three quarters owing to delay in equipment delivery because of COVID-19 lockdowns in China and Pakistan, construction work has picked up pace in Q4 as all main mining equipment has reached site.

Thar Power Plant: The plant remained fully operational throughout the year, maintaining system reliability despite challenges posed by the COVID-19 crisis. The plant achieved 84% availability with a load factor of 83%, dispatching 4,032 GwH to the national grid during the period. The Company also completed its two scheduled outages on both units with zero recordable injury.

Qadirpur Power Plant: The power plant operates on permeate gas and is facing gas curtailment due to depletion of the Qadirpur gas field. To make up for this shortfall, the plant has been made available on mixed mode. During the period, the Plant dispatched a Net Electrical Output of 550 GwH to the national grid with a load factor of 29.5% compared to 58.8% last year. Decline in load factor was primarily on account of lower merit order ranking after crash in international oil prices post COVID - 19. The business posted a PAT of PKR 2,079 million for the current period as compared to PKR 3,403 million for 2019.

Although the ongoing pandemic has caused severe disruptions, Engro’s terminals have ensured continuity of service, maintaining a dynamic strategy to cope with challenges as they arise. The Elengy terminal handled 72 cargoes during the year, delivering 215.4 bcf re-gasified LNG into the SSGC network. Availability factor remained at 97.9% for the year. The LNG terminal currently fulfills more than 12% of the country’s gas requirements. Since its commencement in March 2015, the fertilizer and CNG sectors as well as over 500 industrial units have been revived, whilst the country has saved nearly USD 2.5 billion to date due to replacement of expensive imported furnace oil and diesel with LNG. During this period, the business faced reduction in demand, however, there were no delays in receipts from the customer. The Engro Vopak Terminal witnessed a volumetric decline of 2% for chemicals and LPG handled over last year, mainly attributable to lower imports of phosphoric acid paraxylene offsetting higher LPG marine imports. The business completed 23 years of safe operations and continued to maintain health, safety and quality standards.

The business recorded its 9th consecutive quarter of topline growth. During the year, the Company has reported a revenue of PKR 44.2 Bn, registering a 14% growth vs last year, despite COVID-19 related lockdown and closure of retail & leisure outlets. The overall cost environment remained challenging, with high increases in the commodity costs in last 12 months due to record food inflation and devaluation of the Pakistani Rupee. The Company, however, took multiple business initiatives, including cost optimization and mix management to offset these impacts. As a result, the gross margin improved 80bps versus the same period last year. The Company also continued to drive efficiencies in distribution and administrative expenses through multiple saving initiatives. Consequently, the Company registered a profit after tax of PKR 177 Mn versus a loss of PKR 955 Mn in the same period last year.

Increased focus on the Rice business continued in 2020 and the business recorded a 2.5x increase in profitability compared to 2019. Rice exports also continued to grow and witnessed a volumetric increase of 26%. External quality audit by Bureau Veritas for quality re-certification was successfully completed, maintaining ratings of ‘AA’ for the fourth consecutive year. The rice business has the highest number of quality certifications amongst rice players in Pakistan.

Engro Enfrashare engages in the acquisition and construction of shared telecom towers, provision of various telecommunication infrastructure and related services, including state of the art network monitoring solutions. The Company expanded its footprint further in the tower business and achieved a milestone of delivering a total of 1,265 sites by the end of 2020, catering to all Mobile Network Operators (MNOs) in Pakistan. This portfolio expansion has led to a significant increase in the market share from 18% in 2019 to 41% in 2020.