Pakistan Fertilizer_ Offtakes post a mixed trend, (AKD Daily, Sep 23, 2020)
AKD Daily
Pakistan Fertilizer_Offtakes post a mixed trend
- As per the data released by the NFDC, urea offtake for Aug’20 declined 8/5% MoM/YoY to 573K tons. The decline in offtake was led by 52/13% MoM/YoY decline in EFERT’s urea offtake, due to exceptional offtakes in previous two months.
- On quarter to date basis, EFERT and FFBL have posted 37/18% YoY increase in offtake, while FFC lagged, with offtakes declining 3%YoY.
- The urea inventory at 308K tons remain at half of its 1HCY20 average and, one third of the FY20’s average, hence making a case for Fertz players to increase urea prices in case of dismissal of request to extend GIDC payment timeline.
- DAP offtake for Aug’20 increased 19% MoM and 2.8x YoY to 295K MT, while posting a phenomenal increase of 20% YoY in 8MCY20. FFBL led the pack in 8MCY20, with a 33% YoY increase in DAP offtake.
- Despite an uptick in FFBL’s offtakes, in addition to DAP prices on an uptrend, we advise investors to maintain a cautious stance on the scrip, amid Supreme Court’s verdict of recovery of GIDC payables from the industrials within next 24 months given its precarious liquidity situation. FFC remains our preferred name from the sector (TP: PkR127; total return: 27% at LDCP).
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