Pakistan Fertilizer - Dividend yields remain attractive despite declining offtakes

Pakistan Fertilizer – Dividend yields remain attractive despite declining offtakes

Fertilizer offtakes declined due to extended monsoon rains and deteriorating farmer incomes. Urea sales dropped by 14% year over year in August ’24, and DAP sales plummeted by 66% year over year.
EFERT’s urea sales dropped by 30%YoY in Aug’24. While FFC urea offtakes experienced a 15%YoY drop, it increased by 3%MoM.
Lower gas prices on the Mari network benefit FFC and FATIMA, boosting FFC’s gross margins to 54% in 2QCY24.
We maintain our bullish stance on the sector due to higher dividend yields. FFC/EFERT expects CY24 dividend yields of 17%/15%, respectively.

Courtesy- AKD Research