Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — Q1 2023 Earnings Presentation
26 slides from Engro Fertilizers's earnings presentation, 2023
Slide 1: Analyst Briefing 1Q 2023
Analyst Briefing 1Q 2023 www.engro.com
Slide 2: EFERT Highlights
EFERT Highlights www.engro.com
Slide 3: Quarterly Profitability analysis
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Quarterly Profitability analysis EFERT has announced an interim dividend of PKR 3.5/share for Q1 2023 v/s the PKR 5.5/Share in Q1 2022. 7.0 5.00 4.30 4.50 6.0 4.13 4.00 5.0 3.30 3.50 3.00 3.00 4.0 2.50 3.0 2.00 2.0 1.50 1.00 1.0 0.43 0.50
Slide 4: Quarterly Urea Production & Sales
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Quarterly Urea Production & Sales UREA - PRODUCTION' KT UREA - SALES' KT 700 700 601 600 572 568 577 600 549 551 523 503 500 500 446 400 400 300 300 200 200 171 100 100 0 0 1Q 2019 1Q 2020 1Q 2021 1Q 2022 1Q 2023 1Q 2019 1Q 2020 1Q 2021 1
Slide 5: Significant updates
Significant updates www.engro.com
Slide 6: Rising Gas Cost
Engro Fertilizers Limited – Security 9M 2021Analyst BOD Briefing Q1 2023 Rising Gas Cost • During the quarter, EFERT faced massive escalation in cost of gas supplied under both Fertilizer and Petroleum Policy. Petroleum Policy Gas: o EFERT was already at a significant cost disadvantage compared to o
Slide 7: Urea price increase & other updates
Engro Fertilizers Limited – Security 9M 2021Analyst BOD Briefing Q1 2023 Urea price increase & other updates PKR 554/bag ▪ EFert increased urea price by PKR 554/bag effective March 31, 2023. increase in Urea price ▪ This price increase was taken to mitigate the adverse impact of increase in gas cost
Slide 8: Agri Sector Performance
Agri Sector Performance www.engro.com
Slide 9: Crop Economics
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Crop Economics Significant increase in rice, wheat and sugarcane earnings in 2022-23 vs 2021-22. Wheat 2021-22 2022-23P 2023-24P Sugarcane 2021-22 2022-23P 2023-24P Total expense (PKR) 45,926 72,013 81,523 Total expense (PKR) 99,485 114,2
Slide 10: International Urea Prices at a Premium of 37%
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 International Urea Prices at a Premium of 37% FOB Price* USD 236/T As of March 31, 2023 Landed Equivalent MRP CFR Price USD 253/T PKR Domestic 4,715/Bag Discount on Urea Local Urea MRP 37% PKR *Data Source: CRU weekly report average ~PKR
Slide 11: International Urea Prices at a Premium of 48% (Spot)
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 International Urea Prices at a Premium of 48% (Spot) FOB Price* USD 291/T As of April 13, 2023 Landed Equivalent MRP CFR Price USD 308/T PKR Domestic 5,746/Bag Discount on Urea Local Urea MRP 48% PKR *Data Source: CRU weekly report averag
Slide 12: Industry & EFERT Business Performance
Industry & EFERT Business Performance www.engro.com
Slide 13: Urea & DAP Industry in 1Q 2023
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Urea & DAP Industry in 1Q 2023 UREA - SALES' KT PHOSPHATES - SALES' KT 252 1,634 1,620 236 1Q 2022 1Q 2023 1Q 2022 1Q 2023 Urea industry has declined by a negligible amount of ~1% Phosphates industry has declined by 6%. 13
Slide 14: Industry & Market Share – Urea 1Q 2023
Engro Fertilizers Limited––9M Fertilizes Limited Security 2021 Analyst BOD Briefing Q1 2023 01 Performance Industry & Market Share – Urea 1Q 2023 Industry: 1.63 MT Industry: 1.62 MT 5% 13% 15% 8% 46% 45% 34% 34% 1Q 2022 1Q 2022 2Q 1Q2023 2023 EFERT Fauji Fatima Agritech NFML • Insignificant Industry
Slide 15: Industry & Market Share – Phosphates 1Q 2023
Engro Fertilizers Limited––3Q Fertilizes Limited 2021 BOD Security Analyst Briefing Q1 2023 Industry & Market Share – Phosphates 1Q 2023 Industry: 252 KT Industry: 236 KT 11% 8% 7% 9% 57% 63% 25% 20% 1Q 2022 1Q 2023 EFert Fauji Fatima Private • International DAP prices witnessed decline during 1Q 20
Slide 16: Support required from Government
Support required from Government www.engro.com
Slide 17: Support from Government required
Engro Fertilizers Limited––3Q Fertilizes Limited 2021 BOD Security Analyst Briefing Q1 2023 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 indus
Slide 18: Other Items For Discussion
Other Items For Discussion S. No Topic 1. Fertilizer Industry’s contribution towards the Nation 2. Spend on Urea is a minor cost out of total farmer expense www.engro.com
Slide 19: Fertilizer Industry's contribution towards the Nation
1 Fertilizer Industry’s contribution towards the Nation www.engro.com
Slide 20: Fertilizer industry has shielded the farmers from international urea price rise
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Fertilizer industry has shielded the farmers from international urea price rise Even after a Urea Prices - Local & International substantial decline in international 12,000 prices, local urea 10,734 is significantly cheaper 10,000 9,068 9
Slide 21: Fertilizer sector has passed over 4X benefit to farmers
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 As a result, fertilizer sector has passed over 4X benefit to farmers Farmer Benefit and Subsidy 2010 – Q1 2023 (PKR Bn) ~2,200 ~500 Gas subsidy by GoP net of tax Benefit passed on by Fertilizer Industry Gas price benefit of over 4X has be
Slide 22: Industry provides significant import substitution and benefit to farmers
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Industry provides 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 pri
Slide 23: Benefit passed through urea pricing is more than 2X
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Benefit passed through urea pricing is more than 2X Benefit passed on by fertilizer sector in the form of lower urea prices - International MRP prices - PKR *4,715/bag - Local MRP - PKR 2,994/bag Feed gas subsidy provided by GOP to fertil
Slide 24: Spend on Urea is a minor proportion of the total farmer expense
2 Spend on Urea is a minor proportion of the total farmer expense www.engro.com
Slide 25: Farm Household Spend and Share of Urea
Engro Fertilizers Limited – Security Analyst Briefing Q1 2023 Farm Household Spend and Share of Urea Spend on Urea is a minor cost out of total household spend. Fertilizer, Spend on 19.6% Farm, 33% Spend on Other Urea, 48.4% Other Other fertilizers, Spend, 67% Inputs, 51.6% 80.4% 3.1% 33% 6.5% of fa
Slide 26: Thank you
Thank you www.engro.com