FFC’s EPS is expected to clock in at PKR 3.3/share in 2QCY21 down by 13%YoY from PKR 3.80/share in SPLY. The decline in profitability is mainly due to decline in Urea sales by 18%YoY despite the price increase of ~5%YoY. The company also to face lower other income in absence of dividend income from its subsidiaries and associated company. We estimate PKR2.5/share dividend along with results announcement.

The EPS for FFBL is expected to clock in at PKR 1.50/share in 2QCY21 against a LPS of PKR0.90/share in SPLY. The massive increase in DAP margins remained the main driver while the company didn’t adjust provision of disallowance of unregistered dealers this time which also supported the companies bottom-line, although DAP and Urea sales to register decline of ~20%YoY each. The repayment of long and short term loans, thanks to improved sales also, to reduce the finance cost during the quarter. The recovery in the subsidiaries FFL, FPCL and FML financial further improve cash flow of the company.

The Engro Fertilizer is expected to improve its bottom-line by 29%YoY to EPS 3.7 in 2QCY21. The increase in urea price along with declining finance cost to support PAT of the company. The company is also not incorporate one-off impact of unregistered dealers provisioning. We expect the company to announce PKR3.5/share as interim dividend along with 2QCY21 results.

Courtesy – SPECTRUM Research