Pakistan Fertilizer_Apr'21 urea offtake increase 28%YoY, (AKD Daily, May 27, 2021)
AKD Daily
Pakistan Fertilizer: Apr’21 urea offtake increase 28%YoY
- As per the numbers released by NFDC, urea offtake declined 10% MoM , but were up 28%YoY to 309K MT. The sequential decline in numbers was witnessed industry wide due to seasonality factor, except for EFERT which witnessed 17/178% MoM/YoY uptick, due to a low base effect in the same period previous year.
- The overall urea inventory declined 38%YoY to 530K MT vs. ~854K MT in Apr’20, due to staggered decline in urea price after GIDC elimination last year. The GoP’s decision to supply LNG to hitherto closed fertilizer plants for 10 months may continue to improve inventory levels and reduce upside pressure on urea price.
- DAP offtake on the other hand declined 68/70% MoM/YoY to 45K MT, taking 4MCY21 DAP offtakes to 359K MT, flattish YoY, with FFC leading the show.
- DAP inventory at Apr’21 end stood at 132K MT, down 68% YoY due to supply constraints in global markets. With phosphoric acid prices on a rise (up 45% CYTD), FFBL will continue to pass-on the impact to end consumers to preserve gross margins, in our view.
- We continue to like FFC from the fertilizer space due to healthy EBITDA generation and D/Y of 11.5% on offer. Continued bullish trend in DAP prices in 2HCY21 may warrant us to revisit our valuation of FFBL, where we have incorporated normalized prices in 2H.
AKD Research
Engro Fertilizers Limited is a Pakistan-based company, which is engaged in manufacturing, purchasing and marketing of fertilizers. The Company's brands include Engro Urea, Engro NP, Engro DAP, Zingro, Engro MOP, Engro SSP and Engro Zarkhez. Engro NP is the Company's fertilizer brand with Nitrogen and Phosphorous content in equal quantity. Engro DAP primarily contains Di-Ammonium Phosphate, and is imported by Engro EXIMP and marketed by the Company. Engro DAP is marketed in approximately 50 kilogram bags. Zingro is a micronutrient fertilizer, and is imported by Engro EXIMP and marketed by the Company. Engro Zarkhez has Nitrogen, Phosphorous and Potassium, and is primarily offered for sugar cane, fruit orchards, vegetables, potato and tobacco farming. Engro Envy is primarily offered to urban market for gardens, lawns, flower beds, fruit plants and ornamental plants. The Company is a subsidiary of Engro Corporation.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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