Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
VOLUME RECOVERY DRIVES ANNUAL SURGE IN REVENUES; REVENUE STABILIZES SEQUENTIALLY EFIC recorded revenues of EGP472 million in 1Q21, that came completely unchanged on a sequential basis, while rising sharply by 150% YoY, from the recorded revenues of EGP189 million in 1Q20. The growth in revenue is mainly backed by Granulated Single Super Phosphate (GSSP) sales, where it reached EGP303 million in 1Q21, rising YoY by 792.1% and QoQ by 73.9%. The Powdered Single Super Phosphate (PSSP) sales came ...
Nitrogen fertilizers endured – like many of its chemical peers – a tricky year in 2020 with regards to price fluctuations as markets around the globe learnt to adjust with the blitz of a global pandemic. Urea prices had flirted with lows of USD200/ton for a sizeable portion of 2020 before normalizing at the acceptable level of USD245/ton. Currently, most urea indices that we track are hovering around the very healthy levels of USD300-350/ton bolstered by I) Soaring grain prices that are drive...
OVERVIEW Egyptian Financial and Industrial Company SAE (EFIC) specialises in production and distribution of chemical and agricultural fertilizers, as well as the production of plastic and general bags to fill up its products. The company has two operating plants which produce and sell locally Sulfuric Acid (used as raw material and not sold), Single Super Phosphate-SSP, Powder Single Super Phosphate-PSSP, Granulated Single Super Phosphate-GSSP. Their 99.9% owned subsidiary, Suez Company for F...
Cut TP by 29% to EGP10.0/share. We update our 2020-24e forecasts to reflect a: i) -14% lower sales volume, mainly on lower SSP exports (-47pp p.a.), ii) +1.7% higher average selling price in USD, iii) +4.1% higher EBITDA margin at 2020-24e average of 24.7%, on lower material cost, and iv) +74pp higher WC investments, on higher inventory days. Global SSP sales (65% of EFIC’s revenue) continue to lose market share (2015-20 CAGR of -2.8%) to higher analysis DAP and MAP, according to IHS. Meanwhile,...
New management reignites export strategy. On 28 August, we met with EFIC’s new CEO, Eng. Abdel Aal Tolba, appointed on 27 March. The core highlight was that EFIC standalone and Suez Company for Phosphate Production (SCFP) recorded SSP exports of 128k tonnes in 8M19 and 207k in 7M19, respectively, totalling 335k (237k in 2018, 135k in 2017). Management guides for an additional 25-30k of SSP exports in Sep-19, as the export season usually ends in September, closing 2019 at a record c360k (+1.4x vs...
Cut TP by c39% to EGP14.1/share. Our updated valuation reflects primarily: i) higher phosphate rock and sulphur prices (c51% of cost in 2018e), ii) lower GSSP exports of 100k tonnes in 2018e (135k in 2017a vs. management guidance of 250k) vs. our previous estimate of 174k, and iii) a DCF roll-over. EFIC trades on a 2018e P/E of 16x, c33% above the local peer average, falling to c5x by 2020e, due to higher SSP prices and volumes. This is at a 43% discount to local peers, which we believe fairly c...
TP of EGP23.0/share, implying c22% upside. EFIC trades on a 2018e EV/EBITDA of 5.4x, 37% below local peers (8.6x). Despite EFIC’s unfavourable product mix and aged plants, we argue this is too steep of a discount. We believe that we have fairly incorporated these two issues in our forecasts by assuming suboptimal capacity utilisation rates (65% for SSP unchanged since 2014), and a relatively low terminal growth rate of 2%. Our TP implies a 2018e EV/EBTIDA of 6.3x, 27% below peers (and 16% below ...
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