Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — 9M 2022 Earnings Presentation
36 slides from Engro Fertilizers's earnings presentation, 2022
Slide 1: Analyst Briefing 9M 2022
Analyst Briefing 9M 2022 www.engro.com
Slide 2: EFERT Highlights
EFERT Highlights www.engro.com
Slide 3: 9M Profitability analysis
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 9M Profitability analysis EFERT has announced a dividend of PKR 3/Share for 3Q 2022 (YTD 2022 PKR 8.5/Share) Vs the PKR 3.5/Share in 3Q 2021 (YTD 2021: PKR 11.5/Share) PAT (PKR BN) 14.9 12.5 11.5 10.5 9.6 6.7 9M 2017 9M 2018 9M 2019 9M 20
Slide 4: Our profitability through the quarters
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Our profitability through the quarters… PAT (PKR BN) 4.2 4.4 -0.1 Q3 2022 Q2 2022 Q3 2021 Same period last Current Quarter Last Quarter year 4
Slide 5: Urea Production & Sales for 9M
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Urea Production & Sales for 9M UREA - PRODUCTION' KT UREA - SALES' KT 1,694 1,744 1,560 1,568 1,506 1,486 1,522 1,428 1,451 1,352 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 5
Slide 6: Base Plant Turnaround
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Base Plant Turnaround • The scheduled maintenance activity of Base plant has commenced on September 27, 2022 and is estimated to continue for 60 days. • It will ensure long term reliability and sustainable safe operations of the base plan
Slide 7: Agri Sector Performance
Agri Sector Performance www.engro.com
Slide 8: Positive Momentum In Agri Sector due to rise in commodity prices
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Positive Momentum In Agri Sector witnessed due to rise in commodity prices Earning from Wheat is expected to increase by 27%, from Cotton by 5% and from Rice-Basmati by 73% except Sugarcane (8% dip YOY) due to higher cost of production co
Slide 9: International Urea Prices at a Premium of over 75%
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 01 Performance International Urea Prices at a Premium of over 75% FOB Price* USD 637/T As of Sept 30th, 2022 Landed Equivalent MRP CFR Price USD 657/T PKR Domestic 9,874/Bag Discount on Urea Local Urea MRP 77% PKR *Data Source: CRU weekly
Slide 10: Industry & EFERT Business Performance
Industry & EFERT Business Performance www.engro.com
Slide 11: Increasing DAP prices has significantly affected the market
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Increasing DAP prices has significantly affected the market UREA - SALES’ KT (9 MONTHS) DAP & ZORAWAR SALES’ KT (9 MONTHS) 4,665 4,769 1,216 694 2021 2022 2021 2022 Urea industry has grown by 2% Phosphates industry has declined by of 43%.
Slide 12: Industry & Market Share – Urea 9M
Engro Fertilizers Limited––9M Fertilizes Limited Security 2021 Analyst BOD Briefing 9M 2022 01 Performance Industry & Market Share – Urea 9M Industry: 4.7 MT Industry: 4.8 MT 0% 2% 3% 5% 13% 15% 47% 45% 37% 32% 9M 2021 9M 2022 EFERT Fauji Fatima Agritech NFML ▪ EFERT market share lower vs last year
Slide 13: Industry & Market Share - DAP & Zorawar 9M
Engro Fertilizers Limited––3Q Fertilizes Limited 2021 BOD Security Analyst Briefing 9M 2022 01 Performance Industry & Market Share - DAP & Zorawar 9M Total Industry : 1,216 KT Total Industry : 694 KT 8% 25% 5% 5% 63% 52% 25% 18% 9M FY 2021 9M FY 2022 EFert Fauji Fatima Private www.engro.com 13
Slide 14: Major Enactments & Necessary support required from Government
Major Enactments & Necessary support required from Government www.engro.com
Slide 15: Major Enactments and Changes
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Major Enactments and Changes 1 Super Tax on High Income Earning Persons ➢ “Super tax on high income earning persons” @ 10% has been levied on taxable income exceeding Rs 300M on Fertilizer sector retrospectively on Financial Year 2021 (Ta
Slide 16: Support from Government required
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Support from Government required 1 Sales Tax & Refunds 2 Expiry of Concessionary 3 Subsidy Receivable Gas ➢ Significant mismatch between higher input tax and lower output tax on fertilizers led to ➢ The industry is facing a challenge in p
Slide 17: Special Items For Discussion
Special Items For Discussion S. No Topic 1. Fertilizer Industry’s contribution towards the Nation 2. Flood impact 3. Fertilizer Industry is internationally competitive and will thrive in a fully deregulated environment without any subsidy www.engro.com
Slide 18: Fertilizer Industry's contribution towards the Nation
1 Fertilizer Industry’s contribution towards the Nation www.engro.com
Slide 19: Fertilizer industry has shielded the farmers from international urea price rise
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Fertilizer industry has shielded the farmers from international urea price rise Urea Prices - Local & International 12,000 10,657 10,841 10,734 10,534 10,000 9,153 9,067 9,068 8,574 8,333 8,087 7,908 8,000 7,083 PKR/Bag 5,679 6,000 4,000
Slide 20: Fertilizer sector has passed over 4X benefit to farmers
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 As a result, fertilizer sector has passed over 4X benefit to farmers Farmer Benefit and Subsidy 2010 – Sept YTD 2022 (PKR Bn) ~1,900 ~450 Gas subsidy by GoP net of tax Benefit passed on by Fertilizer Industry Gas price benefit of over 4X
Slide 21: Industry to provide significant import substitution and benefit to farmers
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Industry to provide significant import substitution and benefit to farmers Annualized Import Substitution enabled by Annualized benefit to domestic farmers Fertilizer sector based on Spot based on Spot international prices international p
Slide 22: Benefit passed through urea pricing is almost 8.5X on spot basis
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Benefit passed through urea pricing is almost 8.5X on spot basis Benefit passed on by fertilizer sector in the form of lower urea prices - International MRP prices - PKR *9,874/bag - Local MRP - PKR 2,250/bag Feed gas subsidy provided by
Slide 23: Urea to crop affordability ratio
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Urea to crop affordability ratio The below chart tracks urea cost against the crop prices over the years. Considering 2013-14 as base year, urea cost is 39% more affordable in 2021-22. 60% 39% 40% Fertilizer more affordable 32% 20% 20% 17
Slide 24: Flood impact
2 Flood impact www.engro.com
Slide 25: Flood Causing Huge Damages to the Country
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Flood Causing Huge Damages to the Country The damage is increasing with each passing day as the water is still stagnant in few areas. 84 Districts 33 million 1,663 Deaths 12,865 Injured Damaged out of 160 people affected 2.06 Mn Houses 13
Slide 26: Fertilizer Industry is internationally competitive and will thrive in a deregulated environment
3 Fertilizer Industry is internationally competitive and will thrive in a fully deregulated environment without any subsidy www.engro.com
Slide 27: What deregulation would mean
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 What deregulation would mean Industry Dynamics Existing Structure De-Regulated Industry Pricing set by industry players at a Pricing of urea to be based on Urea Pricing significant discount to imported Import Parity or Industry WACOG urea
Slide 28: Impact of Deregulation on key stakeholders
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Impact of Deregulation on key stakeholders Key Stakeholders Likely Outcome of Deregulation Possible Results/Actions Government Higher revenue through taxes and gas Improved fiscal balance and reduced prices GDS Farmers Higher urea prices
Slide 29: Fertilizer policy 2022-Proposal
Fertilizer policy 2022-Proposal www.engro.com
Slide 30: Key components of new fertilizer policy proposal
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Key components of new fertilizer policy proposal No gas subsidy –Uniform gas rate Urea selling price to remain fully deregulated Export of excess urea capacity Encourage debottlenecking of indigenous gas-based facilities Encourage gas eff
Slide 31: EFERT- Our Reason for Being
? EFERT- Our Reason for Being
Slide 32: Engro Fertilizers Limited – Security Analyst Briefing 9M 2022
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 32
Slide 33: we grow hope & dreams
we grow hope & dreams
Slide 34: Doing Good While Doing Well
Engro Fertilizers Limited – Security Analyst Briefing 9M 2022 Doing Good While Doing Well Education • Inauguration ceremony of new block of Sahara School was held where an additional 200 students will be inducted in the first phase Healthcare • 504 snake bite & 282 dog bite patients were treated. •
Slide 35: Pakistan together we grow
together we grow Pakistan
Slide 36: Thank you
Thank you www.engro.com