reports
Fauji Fertilizer Company Ltd: 1 director
A director at Fauji Fertilizer Company Ltd maiden bought 25,000 shares at 285.600PKR and the significance rating of the trade was 68/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the...
- Team AKD Research
FFC 2QCY23 Analyst Briefing Takeaways, (AKD Off the Analyst's Desk Aug...
FFC held a corporate briefing session to discuss the 1HCY23 performance. To recall, FFC posted a 2QCY23/1HCY23 profit after tax of PkR5.4bn/PkR13.1bn (EPS:PkR4.2/PkR10.28 Per share), ↓30.81%QoQ/↑59.20% in 2QCY23, with aggregate 1HCY23 earnings up by a staggering 136.25%YoY. Further, the company announced a dividend of PkR3.15/sh taking total interim payout to PkR7.41/sh. Revenues and earnings remained the highest ever during the period on the back of consistent urea offtakes (↓2.85%YoY), risin...
- Rahul Hans
Pakistan Fertilizer: April 2023 - Lower FFC offtake reduced industry v...
* Urea offtake in April 2023 reduced by 11% YoY and 17% MoM to c.408,000 tons. The MoM decline in volumes is due to off-season impact. The market share of EFERT and FFBL increased by 4/2 ppt YoY basis to 38%/9%, while the market share of FFC reduced by 7ppt YoY to 33%, amidst self-imposed measures to pause volumes due to price disparity. * During the month, Urea ex-factory price remained unchanged at PKR2,895/bag- this is the price where almost all companies were selling Urea except FFC...
- Rahul Hans
Fauji Fertilizer: 1QCY23 Review - Higher margins deliver earnings surp...
Fauji Fertilizer Company Ltd (FFC) has posted unconsolidated 1QCY23 NPAT of PKR7.7bn (EPS: PKR6.08), up 48% QoQ and 24% YoY. The result is above our expected EPS of PKR5.53, where the major deviation has come from higher-than-expected gross margins. The result is accompanied by an interim cash dividend of PKR4.25/sh (we expected PKR4.70/sh). KEY RESULT HIGHLIGHTS FOR 1QCY23: * Net revenues have increased by 38% YoY and 21% QoQ to PKR36.4bn due to increase in Urea prices. We estimated topline...
- Rahul Hans
Pakistan Fertilizer- 1QCY23 Result Previews
HIGHER GAS PRICES AND EXPENSES WILL REDUCE PROFITS IMS Fertilizer Universe earnings are estimated to reduce by 23% QoQ to PKR12.7bn due to increased gas prices, lower Urea and DAP offtake and exchange losses particularly for FFBL. Industry Urea/DAP offtake is estimated to clock in at 1.62/0.26mn tons in 1QCY23, vs. 1.63/0.25mn tons in 1QCY22. Urea offtake declined amid lower production from EFERT and FFC due to plant breakdown and non-availability of RLNG based plants, while DAP volumes redu...
- Rahul Hans
Pakistan Fertilizer: Feb'23 Sales volume update
Urea offtake in February 2023 reduced by 5% YoY and 20% MoM to c.503,000 tons. The MoM decline in volumes is due to off-season impact. The market share of EFERT increased by 5ppt YoY basis to 37% in Feb’23, while the market share of FFBL reduced by 2ppt YoY to 5%, following higher Urea prices amid increased gas prices of SSGC network. During the month, FFBL increased Urea ex-factory prices by PKR440/bag to PKR2,975 on the back of increase in gas prices for SSGC and SNGPL network, while other ...
- Rahul Hans
Pakistan Fertilizer: January 2023 Sales update
JAN'23 - NORMALIZED VOLUMES DESPITE PRICE HIKE ANTICIPATION * Urea offtake in January 2023 increased by 6% YoY, but was down 24% MoM to c.631,000 tons. The MoM decline in volumes is due to a high base effect and off-season in the initial month of the year. The market share of FFBL/FFC/EFERT shrunk by 5/4/1ppt on YoY basis to 1%/34%/34% in Jan’23. The reduction in market share is primarily due to higher offtake from NMFL (imported fertilizer), which satisfied 22% of the total demand in Januar...
- Rahul Hans
Fauji Fertilizer: 4QCY22 Review - DAP inventory losses elevate COGS; e...
Fauji Fertilizer Company Ltd (FFC) has posted unconsolidated NPAT of PKR5.2bn (EPS: PKR4.09) in 4QCY22, down 13% YoY and 1% QoQ. The result has come lower than our expected EPS of PKR4.92, due to inventory losses being booked on DAP in 4Q, in our view. This takes CY22 NPAT to PKR20.0bn (EPS: PKR15.76), down 8% YoY. The result was accomplished with a final cash dividend of PKR3.15/sh in 4Q versus our expectation of PKR4.0/sh. This takes CY22 total DPS to PKR12.13. On a consolidated level, the ...
- Rahul Hans
Pakistan Fertilizer: Dec 2022 Sales update
STRONG UREA SALES IN DEC TAKES CY22 VOLUMES TO ALL-TIME HIGH Urea offtake in December 2022 increased by 43% MoM and 39% YoY to c.833,000 tons. The increase in offtake was due to anticipation of an increase in Urea prices and relatively strong demand amid higher commodity prices. CY22 Urea offtake thus has surged to all-time high of 6.62mn tons, up 4% YoY. The market share of EFERT/FFC shrunk by 7/2ppt to 29%/37% in CY22; whereas, FATIMA/AGL share increased by 3/2ppt to 17%/5%. FFBL’s market ...
- Rahul Hans
Fertilizer: Nov’22: Urea offtake up despite production challenges
According to NFDC, Urea sales in Nov’22 witnessed a recovery in sales, increasing by 2% YoY to c.583,000 tons (the slump in Oct’22 was 16% YoY). Sequentially, Urea offtake recovered by 36% MoM owing to i) higher contribution being generated from FATIMA, and ii) seasonality factor. Urea offtake for 11MCY22 stands at c.5.8mn tons, similar to last year, where offtake of AGL and FATIMA rose by 76% and 28% YoY, while that of Fauji group and EFERT declined by 2%/19%, respectively. We remain Overwei...
- Rahul Hans
Pakistan Strategy - Government announces Agriculture Package
Prime Minister Shahbaz Sharif unveiled an Agriculture Package that aims to subsidize markup of PKR1,800bn worth of agri-loans, higher than PKR1,400bn loan disbursements from last year. The entire package, which is entitled to cost the government PKR600bn (c.0.8% of GDP) also incentivizes fertilizer product prices as well as tractor imports in the country. IMPACT ON FERTILIZER: NEUTRAL TO POSITIVE FOR DEMAND PM has announced various initiatives on fertilizer products to protect farmers from a ...
- Rahul Hans
Fauji Fertilizer: 3QCY22 Review - Lower margins and other income dampe...
Fauji Fertilizer Co. (FFC) has posted 3QCY22 unconsolidated NPAT of c.PKR5.2bn (EPS: PKR4.12), up 56% QoQ but down 19% YoY, missing our projected EPS of PKR4.60. The variance primarily stems from higher-than-expected distribution expenses and lower other income. This takes 9MCY22 NPAT to PKR14.8bn (EPS: PKR11.64) down 7% YoY. The company announced an interim cash DPS of PKR3.18 versus our expectation of PKR4.0. KEY RESULT HIGHLIGHTS: * Net revenue reduced by 17% YoY and 14% QoQ owing to lowe...
- Rahul Hans
Pakistan Fertilizers - 3QCY22 Result Previews
PROFITS TO SURGE SEQUENTIALLY AMID NORMALIZED TAX RATE * Despite the sequential decline in fertilizer volumes owing to floods and short-lived plant breakdowns of EFERT and FFC, IMS Fertilizer Universe earnings are estimated to increase by a sharp 3.4x QoQ to PKR17.8bn due to lower tax rate, elevated fertilizer prices and strong interest income. * Industry Urea/DAP offtake is estimated to clock in at 1.52/0.14mn tons in 3QCY22, down 13%/77% YoY, owing to floods, and high DAP prices in ca...
- Abdul Ghani Mianoor
Pakistan Fertilizers: Normalised production led to Urea recovery in Au...
According to NFDC, Urea sales in Aug’22 witnessed a slight recovery in sales, although down 15% compared to last year to c.552,000 tons (slump in Jul’22 was 26%). Sequentially, urea offtake recovered owing to i) normalised production post-breakdown of both FFC and EFERT in Jul’22, and ii) seasonality factor. The urea demand for 8MCY22 now stands at 4.3mn tons, against 4.2mn tons last year, where offtake of FATIMA rose by 31%, while that of Fauji group and EFERT declined by 1%/16%, respectivel...
- Abdul Ghani Mianoor
Pakistan Fertilizers: July – Ongoing floods to keep fertilizer demand ...
According to NFDC, Urea sales in Jul’22 witnessed the largest slump since Dec’21, down 26% YoY to c.463,000 tons, largely owed to i) Eid holidays, ii) monsoon season, and iii) plant breakdown of both FFC (Mirpur Mathelo) and EFERT (Enven). The urea demand for 7MCY22 now stands at 3.7mn tons, against 3.5mn tons last year, where offtake of FATIMA and Fauji group rose 35%/4% YoY, while that of EFERT declined by 16% YoY. We remain Overweight on the sector owed to handsome payout and sustainable e...
- Abdul Ghani Mianoor
Fauji Fertilizer: 2QCY22 Review - Strong earnings and payout despite t...
Fauji Fertilizer Company Ltd (FFC) posted unconsolidated NPAT of PKR3.4bn (EPS: PKR2.64) in 2QCY22, slightly lower than last year’s EPS of PKR2.85. The result beat our expected EPS of PKR2.25, due to i) higher gross margin, ii) higher other income and iii) lower-than-expected finance costs. FFC also announced an interim DPS of PKR2.10 against our estimate of PKR1.75. On consolidated basis, the company has posted NPAT of PKR6.5bn (EPS: PKR5.14), up 18% YoY, largely due to higher other income a...
- Abdul Ghani Mianoor
Pakistan Fertilizers: Jun’22 - Preemptive demand from price hike antic...
Urea offtake jumped 47% MoM in Jun’22 to 736k tons as preemptive demand growth surfaced in anticipation of urea price hike. Earlier in Jun’22, government reduced urea prices whilst ensuring resolution of liquidity issues, especially the PKR80bn receivables pertaining to sales tax and subsidies. The urea demand for 1HCY22 now stands at 3.2mn tons against 2.9mn tons last year, where offtake of Fauji Group (FFC and FFBL) rose c.15% YoY and EFERT decreased c.5% YoY. We remain Overweight on the fe...
- Abdul Ghani Mianoor
Pakistan Fertilizers: 2Q22 previews – earnings to falter from budgetar...
* IMS Fertilizer Universe earnings are estimated to decline by a sharp 30% YoY to PKR11.5bn owing to the imposition of supertax and poverty alleviation tax in Budget FY23. Excluding these, NPAT would have been up c.45% YoY. * Industry Urea/DAP offtake is estimated to clock in at c.1.54/0.29mn tons in 2QCY22, up c.5%/50% over the last year. Higher DAP sales are mainly attributable to low base effect amid massive offtake in 1QCY21. * Sequentially, combined net profit of our Fertilize...
- Abdul Ghani Mianoor
Pakistan Fertilizer: May 2022 – Sales Volume Update
INVENTORY LEVELS HAS STARTED TO PILE-UP AMID LOW OFFTAKE AND IMPORTS Urea offtake in May 2022 decreased by 9% mom and 17% yoy to 417,521 tons. The yoy decrease in offtake is likely due to higher Urea prices and higher base effect in SPLY. On a cumulative basis, in 5MCY22, Urea offtake increased by 14% yoy to 2.51mn tons. The sales volumes of FFC decreased by a mere 2% yoy, while that of EFERT and FFBL decreased by 24%/35% yoy, respectively. Urea ex-factory prices had reached PKR1,930-1,980/b...
- Abdul Ghani Mianoor
Pakistan Fertilizers: April 2022 – DAP offtake surge in April
Urea offtake in April 2022 decreased by 10% mom, while increasing 48% yoy to 458,952 tons. The yoy increase is led by better farm economics and low base in SPLY. On a cumulative basis, in 4MCY22, Urea offtake increased by 23% yoy to 2.09mn tons. The sales volumes of FFC and EFERT increased by 44%/43% yoy, whereas that of FFBL declined by 9% yoy. Urea ex-factory prices had reached PKR1,880-1,980/bag in April 2022. The premium in the local market remained unchanged as well, hovering around PKR2...
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