Engro Holdings reports record profit but holds dividend to support key telecom tower acquisition and future investment strategy.
Engro Holdings Limited, formerly known as Dawood Hercules Corporation, reported a consolidated profit of Rs. 73.3 billion for the half year ended June 30, 2025, significantly higher than Rs. 13.8 billion in the same period last year. This sharp increase was mainly due to a one-time accounting gain from the reversal of previously recorded losses on its thermal energy assets, which were earlier marked for sale but are now being retained. Without this one-off adjustment, the underlying profit for the period stood at Rs. 19.6 billion, with Rs. 9 billion attributable to shareholders.
On a standalone basis, Engro Holdings posted a profit of just Rs. 67 million, down sharply from Rs. 4.2 billion last year. The drop is primarily due to the transfer of income-generating investments to a new entity, DH Partners, as part of a restructuring that took effect in January 2025. Additionally, Engro Corporation, a key subsidiary, retained its earnings to help finance a major acquisition, resulting in lower dividend income for the holding company.
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As part of its restructuring, Engro Corporation became a wholly owned subsidiary of Engro Holdings on January 1, 2025, increasing the parent company’s share of profits from 39.97% to 100%. To facilitate this change, Engro issued 723 million new shares, increasing its total share count to 1.2 billion. This has impacted earnings-per-share comparisons with previous periods and is a key reason for the changes in reported figures.
During the same period, Engro completed the acquisition of Deodar, a company owning about 10,600 telecom towers, which is expected to generate long-term cash flows. Despite the strong overall profit, the company decided not to declare an interim dividend, choosing instead to retain earnings to support the Deodar acquisition. Management considers this a strategic investment with the potential to deliver sustainable value to shareholders in the years ahead.
