KARACHI: Engro Holdings posted a 56 percent decline in consolidated profit during 1H CY26, but the headline slump masks a dramatically stronger underlying performance, with core earnings rising nearly 79 percent after stripping out last year's one-off gains.

Engro Holdings' board approved unaudited results for the half year ended June 30, 2026, on Friday, reporting consolidated net profit after tax of Rs30.4 billion against Rs69.3 billion in the corresponding period last year. Earnings per share fell to Rs15.48 from Rs26.23.

Engro Holdings Profit Takes a Headline Hit

The drop looks alarming until the fine print explains it. Last year's owners' share profit included Rs21.2 billion in net one-off gains, largely reflecting a Rs26.6 billion reversal of impairment on thermal energy assets, partly offset by Rs5.4 billion in Deodar transaction costs. That gain simply didn't repeat this year. Strip it out, and owners' share profit actually climbed from Rs10.4 billion to Rs18.6 billion, driven by the full-period inclusion of Deodar following its amalgamation into the group, plus stronger performances across several group businesses.

Telecom and Polymers Stage a Turnaround

Power and mining led the charge, contributing Rs16.6 billion to consolidated profit, up from Rs14.2 billion. The telecom and connectivity segment reversed its Rs2.7 billion loss into a Rs3.9 billion profit. Polymers saw a dramatic improvement, moving from a Rs3.2 billion loss to a Rs1.6 billion gain on higher PVC margins. Fertilizer profit slipped marginally to Rs7.1 billion as elevated DAP prices squeezed farmer affordability, a pressure Engro traces to disrupted international trade flows, production curtailments at OCP in Morocco and continued Chinese export restrictions. Terminals profit fell to Rs865 million as LNG cargo volumes thinned out.

Also Read: Engro Reports Rs7.1 Billion Profit Despite 34% Sales Collapse

Instead of paying shareholders a cash dividend, Engro's board chose to return capital through a share buyback launched after April's annual general meeting. By July 27, Engro had repurchased approximately 21 million shares at an average price of Rs281.68 apiece, completing about 47 percent of its approved buyback mandate. Engro argues that repurchasing shares below their intrinsic value increases each remaining shareholder's participation in the portfolio's future cash flows without requiring additional investment.

Elsewhere in Engro's portfolio, Lotte Chemical Pakistan has opened talks to buy Engro's stake in Engro Polymer and Chemicals, a deal the company says it will update the market on as talks progress. Engro Vopak also locked in a fresh 30-year agreement to keep running its Port Qasim terminal, part of a terminals portfolio that together handles roughly 15 percent of Pakistan's gas supply.

On a standalone basis largely a reflection of dividends flowing up from subsidiaries Engro Holdings reported profit of Rs5.97 billion, sharply higher than the near-negligible Rs67 million booked a year earlier.