Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — H1 2023 Earnings Presentation
24 slides from Engro Fertilizers's earnings presentation, 2023
Slide 1: Analyst Briefing H1 2023
Analyst Briefing H1 2023 www.engro.com
Slide 2: EFERT Highlights
EFERT Highlights www.engro.com
Slide 3: Half Yearly Profitability Analysis
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 Half Yearly Profitability Analysis EFERT has announced an interim dividend of PKR 3.0/share for Q2 2023. Cumulative PKR 6.50/share for H1 2023 v/s the PKR 5.50/share in H1 2022. 12.0 9.00 7.87 8.00 10.0 7.00 8.0 6.00 5.38 5.00 6.0 4.05 4.
Slide 4: Our profitability through the quarters…
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 Our profitability through the quarters… PAT PKR (Bn) 4.80 4.22 4.4 1.10 -0.98 Q2 2022 Q2 2022 Q1 2023 Q2 2023 Q2 2023 (Without Super Tax) (With Super Tax) (With Super Tax) (Without Super Tax) 4
Slide 5: Engro Urea Production & Sales
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 Engro Urea Production & Sales Production (KT) Sales (KT) 1,167 1,136 1,118 1,115 1,098 1,070 1,034 906 897 868 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 5
Slide 6: Significant Updates
Significant Updates www.engro.com
Slide 7: Finance Act 2023 Implications
Engro Fertilizers Limited––3Q Fertilizes Limited 2021 BOD Security Analyst Briefing H1 2023 Finance Act 2023 Implications 1 Super Tax 2 Federal Excise Duty 3 Sales Tax on DAP ➢ The Govt through Finance Act 2023 ➢ Through the Act 5% FED was ➢The Act has also imposed 5% GST (Act) has amended Section 4
Slide 8: Urea price increase & other updates
Engro Fertilizers Limited – Security 9M 2021Analyst BOD Briefing H1 2023 Urea price increase & other updates ▪ EFERT increased urea price by PKR 175/bag effective July 1st, 2023. (PKR 150/bag for FED and PKR 175/bag PKR 25/bag dealer margin adjustment). increase in Urea price ▪ As part of the Financ
Slide 9: Industry & EFERT Business Performance
Industry & EFERT Business Performance www.engro.com
Slide 10: Urea & DAP Industry in H1 2023
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 Urea & DAP Industry in H1 2023 UREA - SALES' KT PHOSPHATES - SALES' KT 3,244 3,098 550 465 H1 2 0 2 2 H1 2 0 2 3 H1 2 0 2 2 H1 2 0 2 3 Urea industry has declined by ~5% Phosphates industry has declined by ~15%. 12
Slide 11: Industry & Market Share – Urea H1 2023
Engro Fertilizers Limited––9M Fertilizes Limited Security 2021 Analyst BOD Briefing H1 2023 01 Performance Industry & Market Share – Urea H1 2023 Industry: 3.24 MT Industry: 3.10 MT 5% 7% 3% 14% 11% 47% 46% 34% 33% H1 2022 EFERT Fauji Fatima Agritech NFML H1 2023 13
Slide 12: Industry & Market Share – Phosphates H1 2023
Engro Fertilizers Limited––3Q Fertilizes Limited 2021 BOD Security Analyst Briefing H1 2023 Industry & Market Share – Phosphates H1 2023 Industry: 550 KT Industry: 465 KT 8% 4% 8% 5% 70% 66% 21% 18% H1 2022 H1 2023 EFert Fauji Fatima Private www.engro.com 14
Slide 13: Support Required from Government
Support Required from Government www.engro.com
Slide 14: Support Required from Government
Engro Fertilizers Limited––3Q Fertilizes Limited 2021 BOD Security Analyst Briefing H1 2023 Support Required from Government 1 Sales Tax & Refunds 2 Subsidy Receivable ➢ Significant mismatch between higher input tax and lower output tax on fertilizers led to piling up of substantial sales tax refund
Slide 15: 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 16: Fertilizer Industry's contribution towards the Nation
1 Fertilizer Industry’s contribution towards the Nation www.engro.com
Slide 17: International Urea Prices at a Premium of 41%
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 International Urea Prices at a Premium of 41% FOB Price* USD 260/T As of June 30, 2023 Landed Equivalent MRP CFR Price USD 273/T PKR Domestic 5,090/Bag Discount on Urea Engro Urea MRP 41% PKR *Data Source: CRU weekly report average ~PKR 2
Slide 18: International Urea Prices at a Premium of 50% (Spot)
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 International Urea Prices at a Premium of 50% (Spot) FOB Price* USD 322/T As of July 20, 2023 Landed Equivalent MRP CFR Price USD 335/T PKR Domestic 6,372/Bag Discount on Urea Engro Urea MRP 50% PKR *Data Source: CRU weekly report average
Slide 19: Fertilizer industry has shielded the farmers from international urea price rise
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 Fertilizer industry has shielded the farmers from international urea price rise Urea Prices - Local & International Even after a 10,000 substantial movement 9,153 in international prices, 8,459 local urea is 8,333 significantly cheaper 8,
Slide 20: Fertilizer sector has passed over 4X benefit to farmers
Engro Fertilizers Limited – Security Analyst Briefing H1 2023 As a result, fertilizer sector has passed over 4X benefit to farmers Farmer Benefit and Subsidy 2010 – H1 2023 (PKR Bn) ~2,300 ~510 Gas subsidy by GoP net of tax Benefit passed on by Fertilizer Industry Gas price benefit of over 4X has be
Slide 21: Industry provides significant import substitution and benefit to farmers
Engro Fertilizers Limited – Security Analyst Briefing H1 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 22: 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 23: Farm Household Spend and Share of Urea
Engro Fertilizers Limited – Security Analyst Briefing H1 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% 3.2% 33% 6.5% of fa
Slide 24: Thank you
Thank you www.engro.com