Pakistan Fertilizer: Nov'18 offtake expectedly stumbles,
Nov'18 total fertilizer offtake fell 23%MoM/32%YoY to 0.85mn tonnes, constituted by urea offtake of 497K tonnes (+7%MoM/-17%YoY), DAP sales of 232K (-42%MoM/-47%YoY), NP sales of 31K (-33%MoM/-45%YoY) and CAN offtake of ~23k (-33%MoM/-62%YoY).
Domestic urea production at 527k tonnes (-6%MoM/+26%YoY), holding market share for sales intact at 41%/28%/15%/9% for FFC/EFERT/FATIMA/FFBL moving -38/-43/+67/-53bpsYoY.
11MCY18 cumulative offtake data remained lackluster (total offtake of 8.4mn tonnes -5%YoY), with Urea/DAP/NP/CAN constituting 61/19/5/7% of industry sales, moving +26/+7/-21/-4bpsYoY
10-30% increase CYTD in nutrient prices accompanied by slower harvesting and availability issues have pulled nutrient offtake during Rabi 18-19 (Oct-Nov) by 10%YoY, leading to inventory levels rising by 15/5/22/27%MoM for Urea/DAP/CAN/NP, making for 0.5/8.8/2.5/1.2x monthly average offtake
Despite a mundane operational outlook, the sector has returned +11%CYTD, where considerations surrounding manageable leverage (EFERT/FFC Sep'18 D/E: 61.6/81.3% vs. 79.4/115.6% in Dec'17) and payouts (EFERT/FFC Dividends/ OCF CY18TD stands at 49.3/95.4%) round-up an investment case steeped in defensive characteristics for larger players.
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
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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