Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — Q1 2019 Earnings Presentation
13 slides from Engro Fertilizers's earnings presentation, 2019
Slide 1: Analyst Briefing 1Q 2019
ANALYST BRIEFING 1Q 2019
Slide 2: Business Highlights
BUSINESS HIGHLIGHTS For 1Q 2019, EFERT’s Profit After Tax (PAT) stood at PKR PKR M 1Q 2019 1Q 2018 4,007 M vs 1Q 2018 PAT of PKR 3,890 M Total Revenue 23,652 18,219 Higher profitability was led by Gross Profit 7,599 7,331 Higher realized prices and sale of DAP and SFB; and Finance Cost (799) (
Slide 3: Urea Market Environment
UREA MARKET ENVIRONMENT Urea sales for 1Q 2019 clocked in at 1,348 KT, up by 8.5% vs SPLY Urea Industry Chang (KT) 1Q 2019 1Q 2018 EFERT 1Q 2019 sales were 435 KT, down 12% vs 497 KT SPLY ,due to lower e production Opening Inv. 186 268 Production 1,335 1,333 EFERT market share stood at 32% vs.
Slide 4: Comparison of Local vs Int Price
COMPARISON OF LOCAL VS INT PRICE Despite significant delta vs. international Urea prices, the Fertilizer industry continues to transfer benefit to the farmer, which translates to PKR 20 Billion for the year, over and above the feed gas price subsidy Comparison of Local vs. International Urea Price S
Slide 5: Benefit Passed on to Farmers (Spot)
BENEFIT PASSED ON TO FARMERS (SPOT) PKR/BAG Imported Urea price 2,338 A Current MRP 1,830 B Benefit passed on to farmers by Industry 508 C=A–B Impact of lower feed gas price 490 J Excess benefit passed to farmer per bag 18 D=C-J Feed gas price per MMBtu 485 F Fuel gas price per MMBtu 930 G Increment
Slide 6: Price Comparison Pre and Post Subsidy
PRICE COMPARISON PRE AND POST SUBSIDY April 29, October 5, MRP/bag July 01, 2017 July 1, 2018 July 16, 2018 April 6, 2019 Total Impact 2016 2018 MRP before price change 1,790 1,400 1,400 1,560 1,610 1,740 1,790 Price (reduction) / increase (50) (56) 100 (6) Cash (subsidy) / removal of cash (156) 56
Slide 7: Urea Key Challenges
UREA KEY CHALLENGES Fertilizer industry continues to face challenges in the form of prior subsidy despite of the fact that the subsidy given on fertilizers was timely passed on to farmers whereas the government is yet to pay back the subsidy (Industry - PKR 20 B, Efert PKR 6.5 B) Subsidy ageing PK
Slide 8: Urea: GIDC Pass Through Impact
UREA: GIDC PASS THROUGH IMPACT The government started levying GIDC on Feed and Fuel gas in Dec 2011. To date, pass through of GIDC to farmers has been as follows: GIDC Impact PKR/bag Feed GIDC (PKR 300/MMBTU * 22.4 Feed Index) 342 Fuel GIDC (PKR 150/MMBTU * 5.6 Feed Index) 43 Total GIDC Impact per
Slide 9: Contribution to National Exchequer
CONTRIBUTION TO NATIONAL EXCHEQUER PKR 12.5 B contributed to exchequer PKR/B Sales Tax 64 0% 16% 29% Tax charge (Corporate tax) 122 Other Duties (WWF, WPPF etc) 35 Total tax impact 221 55% • The Company contributes PKR 221/bag in the form of taxes to the National Exchequer (excluding GIDC) Sales Tax
Slide 10: Direct Subsidies to Farmers
DIRECT SUBSIDIES TO FARMERS Government laid special focus on small farmers in its manifesto: ‘The gross neglect of the agriculture sector, especially small farmers, will hamper Pakistan’s GDP growth rate if left unattended and an aggressive turnaround is now pertinent’ ‘We will make inputs cheaper f
Slide 11: Phosphates Market Environment
PHOSPHATES MARKET ENVIRONMENT 1Q 2019 industry sales stood at 197 KT vs 363 KT in 1Q 2018 (down 46%) DAP Prices CFR (USD/t) Lower industry offtake was mainly due to escalating DAP international 600 500 prices and rupee devaluation 400 300 EFERT recorded sales of 85 KT during 1Q 2019 vs 54 KT i
Slide 12: Speciality Fertilizer Business
SPECIALITY FERTILIZER BUSINESS Major products of SFB include Zarkhez (Potash based product), NP and Potash Prices (CFR) USD/t other specialized products 350 Total sales for SFB stood at 54 KT vs sales of 44 KT in 1Q 2018, an 300 250 increase of 23% 200 150 100 EFERT’s potash market share clock
Slide 13: Thank You Q&A
THANK YOU Q&A Security Analyst Briefing Security Analyst Briefing FYFY2018 2016