Restoration of FatimaFert to Add PKR 0.32/share to FATIMA’s CY18 EPS
As per news reports, the Government has restored supply of gas to FatimaFert Limited(FatimaFert) from September 20, 2018 on short term arrangement for period of four months to meet the shortfall of Urea in upcoming Rabi season. The news reports suggest that for next two months of supplies, the Government will share 50% of cost of RLNG, comprising one-third of total volume that will be blended with two third of locally produced natural gas. According to our discussion with the management of FatimaFert, Government has not mentioned the pricing of gas after first two months.
Assuming the Government ceases to share 50% cost of RLNG after first two months, our calculation shows that this arrangement will add PKR 0.32/share in Fatima Fertilizer Company Limited’s (FATIMA) CY18 EPS, which will climb to PKR 0.40/share if Government continues to share cost of RLNG for complete period of four months. In our calculation, we have assumed FatimaFert’s capacity utilization level of 100%.
Please note that our target of PKR 37.30 does not incorporate recent developments.
Fatima Fertilizer Company Limited is a Pakistan-based fertilizer manufacturing company. The Company is engaged in manufacturing and marketing of Nitrogen, Phosphate and Potash fertilizers. It produces a range of fertilizers, including Sarsabz Calcium Ammonium Nitrate (CAN), Sarsabz Nitro Phosphate (NP), Nitrogen Phosphorous Potassium (NPK) and Sarsabz Urea. Its CAN is a granulated nitrogenous fertilizer. Sarsabz Urea can be applied in various forms and it can be spread in bulk alone or can also be mixed with other fertilizers before application. Its NP can be applied on various types of soils. The Company has a production base for Nitric Acid. The Company has annual production capacity of Urea 500,000, CAN 420,000, NP 244,000, Nitric Acid 500,000 and Ammonia 500,000. It also offers services and support to farmers from education on farming practices and research oriented agricultural practices.
Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.