PACRA Maintains Entity Ratings of Engro Corporation Limited

The ratings reflect Engro Corporation's ('Engro Corp' or " the Company") established position as a conglomerate with a diverse pool of investments under four verticals: food and agriculture, petrochemicals, energy and related infrastructure, and telecommunication infrastructure. Engro Corp's various investments in diversified sectors exhibit strong performance and profitability.

Respective businesses under the Umbrella of the Holdco exhibit their strength through continued growth trajectory in 9MCY19 despite challenging economic environment. Engro Fertilizer ('Efert'), being the second largest in the fertilizer sector, increased it's market share and is expected to remain stable. Engro Polymer and Chemical ('Epolymer) has a fortified position in the local PVC industry with capacity enhancements in progress and new Hydrogen Per Oxide project on the cards. The sizeable investments in the energy chain, through Engro Energy, have progressed in a timely manner. EFert, and EPolymer announced higher dividends compensating for no dividend from Engro Elengy Terminal ('Elengy') after the Group's divestment of 24% stake in the business. EVopak continued as a stable cash producer. Engro Corp has a low leveraged capital structure, very strong coverages and liquidity signifying its robust financial profile. It's ability to limit debt levels to fifty percent of its equity (excluding sovereign linked debt) at group level provides comfort to ratings. The ratings factor in HoldCo's strong organizational structure, designed to control the strategic direction of its subsidiaries, and strong governance framework.
The ratings are dependent on the management's ability to execute its envisaged strategy of growth and expansion. Sustainability in the performance of subsidiaries reflecting stable dividends and effective management of financial profile. Meanwhile, effective utilization of liquid assets to enhance investment portfolio is important.

About the Entity
Engro Corporation Limited is a public listed company. The principal activity of the Company is to manage investments in subsidiary companies, associated companies and joint ventures. Dawood family holds around 46% stake in Engro Corp majority of which is through its corporates, whereas ~2% is owned through individuals of Dawood family. Mr Hussain Dawood chairs the Board of Directors whereas Mr Ghias Khan is President and CEO of Engro Corp.