Slide 1: Analyst Briefing 2Q 2019
ANALYST BRIEFING 2Q 2019
Slide 2: Business Highlights
BUSINESS HIGHLIGHTS For 1H 2019, EFERT’s Profit After Tax (PAT) stood at PKR PKR M 1H 2019 1H 2018 7,184 M vs 1H 2018 PAT of PKR 7,149 M Total Revenue 50,643 41,116 Higher profitability was led by : Gross Profit 16,115 14,020 Higher realized prices and sale of DAP and SFB; Finance Cost (2,019)
Slide 3: Urea Market Environment
UREA MARKET ENVIRONMENT Urea industry sales for 1H 2019 clocked in at 2,874 KT, up by 5% vs SPLY Urea Industry Change (KT) 1H 2019 1H 2018 EFERT 1H 2019 sales were 887 KT, down 11% vs 994 KT SPLY , due to lower Opening Inv. 186 260 avails. Production 2,902 2,658 EFERT market share stood at 31%
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 (
Slide 5: Price Comparison Pre and Post Subsidy
PRICE COMPARISON PRE AND POST SUBSIDY April 29, July 01, July 16, October 5, July 01, MRP/bag July 1, 2018 April 6, 2019 Total Impact 2016 2017 2018 2018 2019 MRP before price change 1,790 1,400 1,400 1,560 1,610 1,740 1,830 1,790 Price (reduction) / increase (50) (56) 100 (6) Cash (subsidy) / remov
Slide 6: GIDC and Gas Price Increase Impact
GIDC AND GAS PRICE INCREASE IMPACT OGRA increased gas prices by 62% for feed (PKR 300/mmBTU from PKR 185/mmBTU) and 31% for fuel (PKR 1,021/mmBTU from PKR 780/mmBTU) with effect from July 1, 2019. Additionally, gas cost for EFERT continues to increase due to the impact of PKR devaluation on Concessi
Slide 7: Urea Key Challenges
UREA KEY CHALLENGES Fertilizer industry continues to face challenges in the form of prior subsidy despite 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 PKR B
Slide 8: Phosphates Market Environment
PHOSPHATES MARKET ENVIRONMENT 1H 2019 industry sales stood at 643 KT vs 679 KT in 1H 2018 (down 5%) 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 214 KT during 1H 2019 vs 174 KT
Slide 9: Speciality Fertilizer Business
SPECIALITY FERTILIZER BUSINESS Potash Prices (CFR) USD/t Total sales for SFB stood at 110 KT vs sales of 81 KT in 1H 2018, an 350 increase of 36% 300 250 EFERT’s potash market share clocked in at 66% vs. 48% in SPLY on 200 150 account of competitive pricing vs private importers 100 50 The over
Slide 10: Other Achievements
OTHER ACHEIVEMENTS PAVE Project (Partnerships and Value Expansion in Seeds Value chain) has been selected as winner in the “Social Empowerment” category in Enterprise Asia’s regional awards held in Taipei, Taiwan on May 24, 2019. PAVE project has successfully completed its first year of operations
Slide 11: GST Refundable Buildup
GST REFUNDABLE BUILDUP Refundable created due to mismatch between input and output tax: Urea sales: PKR 2.4B / year (PKR 60/bag) DAP sales: PKR 1.3B / year (PKR 111/bag) The refund over DAP sales also includes buildup due to introduction of 3% VAT. The tenor of the settlement of these refu
Slide 12: Budget Impacts
BUDGET IMPACTS S.No Amendment and comments Freezing of future Corporate Tax Rate to 29% (Previously it was to be reduced to 25% till FY 2023): 1 EFERT's P&L affected as follows: ▪ Deferred Tax Liability was reduced in 2018, which has now been restated 2 Final tax regime changed to Minimum tax, as a
Slide 13: Thank You Q & A
THANK YOU Q&A Security Analyst Briefing 2Q 2019