“Sarsabz Paagh” award recognizes top-performing dealers

In our region, a turban or “paagh” is considered a symbol of honor. Accordingly, Fatima Fertilizer invited 180 of its top performing dealers from all over Pakistan to attend a special awards ceremony held in recognition of their outstanding performance and support to the company.… Continue

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The fertilizer sector looks good for investment

· We maintain our “over-weight” stance on the fertilizer sector due to its stable demand dynamics, attractive dividend yield and reasonable pass-on ability.

· The upcoming gas tariff hike of 42% and 82% for feed and fuel gas will increase the cost, however we believe that the manufacturers have decent pricing power given the significant discount between local and international urea prices.… Continue

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Fertilizers sales disturbed due to floods

According to the provisional fertilizer offtake data for the month of Aug’22, urea offtake depicted a fall of 16% YoY to 542k tons against 649k tons in SPLY owed to heavy rainfall across the country resulting in flash floods. Offtake of FFC and FFBL (combined) and EFERT declined by 31% and 14% YoY, settling at 219k tons and 175k tons, respectively.… Continue

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Pakistan urea demand for 7MCY22 now stands at 3.7mn tons

According to NFDC, Urea sales in Jul’22 witnessed the largest slump since Dec’21, down 26% YoY to c.463,000 tons, largely owed to i) Eid holidays, ii) monsoon season, and iii) plant breakdown of both FFC (Mirpur Mathelo) and EFERT (Enven).

The urea demand for 7MCY22 now stands at 3.7mn tons, against 3.5mn tons last year, where offtake of FATIMA and Fauji group rose 35%/4% YoY, while that of EFERT declined by 16% YoY.… Continue

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Fatima Fertilizer earnings dwindle due to higher-than-expected super tax

Fatima Fertilizer Co. (FATIMA) has posted a 2QCY22 NPAT of c.PKR0.2bn (EPS: PKR0.08), down a sharp 97% both sequentially and in SPLY, missing our projected EPS of PKR2.03. The variance primarily stems from higher-than-expected taxation and other expenses. This drags down 1HCY22 EPS by 37% YoY to PKR2.79.… Continue

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Fatima Fertilizer receives international gold-standard acclaim for best HSE performance

Fatima Fertilizer recently received an international acclaim by the International Fertilizer Association (IFA) through the Green Leaf Award that recognizes outstanding performance in safety, health and environment (SHE) in fertilizer production among the association’s members and is an integral part of its protect & sustain product stewardship initiative.… Continue

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Engro Corporation standalone revenue in 1H 2022, exhibiting a substantial growth of 92%.

Pakistan’s premier conglomerate, Engro Corporation (PSX: ENGRO) announced its financial results for the first half of the year ending June 30, 2022.

Overview of Financial Performance

Engro Corporation’s standalone revenue increased from PKR 8.6 bn in 1H 2021 to PKR 16.6 bn in 1H 2022, exhibiting a substantial growth of 92%.… Continue

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Engro Corporation announced a cash dividend of PKR 11.00/share in 2QCY22

Engro Corporation Limited (ENGRO) announced its 2QCY22 financial result with a consolidated loss after tax of PKR 558mn (LPS: PKR 0.97) in contrast to PKR 8,717mn (EPS: PKR 15.13) in SPLY. On a cumulative basis, the consolidated earnings plummeted by 57% YoY, settling at 7,414mn (EPS: PKR 12.87).… Continue

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Engro Polymer & Chemicals plans de-bottlenecking of VCM production

 Engro Polymer & Chemicals (EPCL) has announced that the basic engineering study is under process for de-bottlenecking of VCM production facility to 300K MT from the existing 254K MT. It may be mentioned here that EPCL announced 2Q2022 earnings today, where company recorded earnings of Rs2.57/share down 25% YoY and 50% QoQ.… Continue

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Engro Polymer & Chemical announced a cash dividend of PKR 2.5/share

Engro Polymer & Chemicals Limited (EPCL) announced its 2QCY22 financial result today where the company posted a profit after tax (PAT) of PKR 2,338mn (EPS: PKR 2.45), down by 25% YoY compared to PKR 3,122mn (EPS: PKR 3.35) during SPLY. On a QoQ basis, earnings decreased by 50%.… Continue

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Pakistan Fertilizer: Gas tariff hike to further push urea price

· Across the board increase in gas tariff is just around the corner as ECC has already approved the gas tariff hike which is awaiting final nod from federal cabinet.

· As per news flows, ECC has approved gas tariff hike of 42% and 82% for feed & fuel gas of fertilizer manufacturers.… Continue

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Lotte Chemical Pakistan announced a surprise healthy payout of PKR 4/sh

Beating street estimates, LOTCHEM posted NPAT of PKR2.79bn (EPS: PKR1.84) in 2QCY22, up a sharp 189% YoY and 7% QoQ. This is against our estimate of PKR1.2bn (EPS: PKR0.81), where the major deviation stemmed from higher-than-expected PTA-PX spreads and topline growth.… Continue

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ICI Pakistan announced a cash dividend of PKR 15/share

· ICI Pakistan Limited (ICI) announced its 4QFY22 financial result today where the company posted a profit after tax (PAT) of PKR 663mn (EPS: PKR 7.18), down by 30% YoY compared to PKR 947mn (EPS: PKR 10.25) during SPLY. On a QoQ basis, earnings went down by 67%.… Continue

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FFC has announced cash dividend of PkR2.10/sh.

Fauji Fertilizer Company (FFC) has announced its 2QCY22 result, where it posted unconsolidated PAT of PkR3.3bn (EPS: PkR2.64), down 7%YoY. This takes cumulative 1HCY22 PAT to PkR9.6bn (EPS: PkR7.55) vs PAT of PkR9.4bn (EPS: PkR7.42) in same period last year. The result is above our expectation attributable to higher other income, possibly due to higher than expected dividend from PMP.… Continue

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The urea demands for 1HCY22 now stands at 3.2mn tons

Urea offtake jumped 47% MoM in Jun’22 to 736k tons as preemptive demand growth surfaced in anticipation of urea price hike. Earlier in Jun’22, government reduced urea prices whilst ensuring resolution of liquidity issues, especially the PKR80bn receivables pertaining to sales tax and subsidies.… Continue

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ICI Pakistan likely to becomes sole PTA producer

ICI Pakistan Limited (ICI) has announced intention to acquire approximately 75.01% shareholding or (1,135.86mn shares) of Lotte Chemicals Pakistan Limited. A few weeks ago, ICI received a conditional bid from Morinaga Milk, Japan to acquire approximately 33.3% of NutriCo Morinaga Limited for US$56.6mn.… Continue

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Fauji Fertilizer is expected to unveil its 1HCY22’s financial result on 28th Jul’22

Fauji Fertilizer Company Limited is expected to unveil its 1HCY22’s financial result on 28th Jul’22, where we expect earnings to clock-in at PKR 9,147mn (EPS: PKR 7.19), down by 3% YoY. On a quarterly basis, the bottom-line is projected to reduce by 20% YoY, settling at PKR 2,908mn (EPS: PKR 2.29) in 2QCY22 amid super tax being charged during the quarter.… Continue

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FFBL reports its earnings dent by super tax impacts in 2QCY22.

Fauji Fertilizer Bin Qasim Limited (FFBL) announced the financial result for 2QCY22 yesterday, where the company posted earnings of PKR 1,783mn (EPS: PKR 1.38) compared to PKR 2,609mn (EPS: PKR 2.03) in 2QCY21, down by 32% YoY on account of imposition of super tax during the quarter.… Continue

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FFBL is scheduled to announce its financial result for 1HCY22 on 25th Jul’22

Fauji Fertilizer Bin Qasim Limited (FFBL) is scheduled to announce its financial result for 1HCY22 on 25th Jul’22, where we expect the company to post a profit after tax of PKR 3,049mn (EPS: PKR 2.36), down by 21% YoY. The drop in earnings comes on the back of higher taxation during the 2QFY22 tagged with fall in dividend income.… Continue

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Pakistan fertilizers companies’ earnings likely to decline due to one-time Super Tax

We estimate AHCML Fertilizer universe earnings to decline by 52% YoY in 2Q2022 mainly due to the imposition of super tax. Similarly, on QoQ basis earnings are expected to decline by 61%.

To recall, the Government of Pakistan through Federal Budget FY23 has imposed a super tax of 10% on CY21 earnings whereas 4% will be charged on CY22 earnings.… Continue

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Efert BMR of old plants improve their production

EFERT production has improved and grew at a 3-year CAGR (2018-2021) of 5% against an industry CAGR of 2%. This was on the back of the improved gas supply and efficiency of the Enven plant. Further, the company has undertaken a BMR of old plants, which is expected to improve their production.… Continue

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Pakistan fertilizer sales are likely at 724k tons in Jun-2022, up 5% YoY

Pakistan’s urea sales in Jun-2022 expected to clock in at 724k tons, up 5% YoY. The same is also likely to be up 74% MoM due to seasonal impact. Urea sales in 1H2022 are expected to clock in at 3,234k tons compared to 2,899k tons in 1H2021, up 12% YoY due to strong Urea demand amid a higher gap between Urea and DAP.… Continue

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Pakistan Fertilizer industry see mixed trend in sales during last month

Urea offtake in May 2022 decreased by 9% mom and 17% yoy to 417,521 tons. The yoy decrease in offtake is likely due to higher Urea prices and higher base effect in SPLY. On a cumulative basis, in 5MCY22, Urea offtake increased by 14% yoy to 2.51mn tons.… Continue

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The fertilizer demand would amplify due to the upcoming Rabi season

The demand for fertilizer in the country remained strong in unbeatable markets from agriculture; currently, it contributes ~22% to total GDP, and during the last 20 years, its contribution

remained at ~19%.. The government targets agriculture growth of 3.9% for FY23 mainly due to recovery in cotton and wheat production, ample availability of water, certified seeds, and agriculture credit facilities.… Continue

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Pakistan Fertilizer Sector – sales fall in May 2022

As per provisional fertilizer offtake data for the month May’22, urea offtake plummeted by 18% YoY to 412k tons compared to 501k tons in SPLY.

Offtake of FFC and FFBL (combined), EFERT, and FATIMA depicted a fall of 10%, 27%, and 32% YoY, respectively, clocking in at 217k tons, 146k tons, and 32k tons, respectively.… Continue

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