Pakistan Fertilizer_Offtake normalize post a phenomenal Jun’20, (AKD Daily, Aug 26, 2020)
AKD Daily
Pakistan Fertilizer: Offtake normalize post a phenomenal Jun’20
- As per the data released by the NFDC, urea offtake for Jul’20 declined 51%MoM but increased 24%YoY to 574K tons. The sequential decline in offtake is as a result of high base effect.
- On YoY basis, the increase was witnessed across the board, except for FFC (urea offtake down 37%YoY). EFERT led the pack, accounting for approximately 60% of the month’s urea offtake.
- On cumulative basis, the urea offtake remained flattish YoY, clocking in at 3.2mn MT for 7MCY20. Dismal offtake in the month of Jul’20 has made FFC to lag on cumulative basis, whereas FATIMA and FFBL led the pack.
- DAP offtake for Jul’20 increased 41%/5.2x MoM/YoY to 247K MT, due to onset of Rabi season. On cumulative basis, FFBL remained at the forefront, with DAP offtake up 18%YoY in 7MCY20.
- Despite sluggish offtake number for FFC, it is our top pick from the sector amid the GIDC decision due to: (i) best liquidity situation and (ii) healthy EBITDA generation, which will enable the company to sustain its D/Y north of 11% in CY20/21F (TP: PkR127/sh; total return 28%).
AKD Research
Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.
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