Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — 1H 2020 Earnings Presentation
26 slides from Engro Fertilizers's earnings presentation, Jul 30, 2020
Slide 1: Analyst Briefing 1H 2020
ANALYST BRIEFING 1H 2020
Slide 2: Business Highlights
Engro Fertilizer Ltd- 2Q Security Analyst Briefing BUSINESS HIGHLIGHTS For 1H 2020, EFERT’s Profit After Tax (PAT) stood at PKR 4,457M PKR M 1H 2020 1H 2019 vs 1H 2019 PAT of PKR 7,184M Total Revenue 40,702 50,642 Lower profitability and gross profit was largely attributable to price reduction a
Slide 3: Urea Market Environment
Engro Fertilizer Ltd- 2Q Security Analyst Briefing UREA MARKET ENVIRONMENT ➢ Urea industry sales for 1H 2020 clocked in at 2,646 KT, down by 8% vs 2,878 KT in 1H Urea Industry 2019. The decrease was owing to (i) uncertainty created by subsidy announcement; (ii) locust Change (KT) 1H 2020 1H 2019 att
Slide 4: Phosphates Market Environment / SFB Market Environment
Engro Fertilizer Ltd- 2Q Security Analyst Briefing PHOSPHATES MARKET ENVIRONMENT ➢ 1H 2020 industry sales stood at 551KT vs 643KT in 1H 2019 (down 14%). This negative change is attributed to the subsidy announcement coupled with logistical challenges across the value chain, posted Phosphates Market
Slide 5: Industry Challenges
Industry Challenges 1H BOD 2020 www.engro.com
Slide 6: Fertilizer Sector Key Issues – Dealer Registration
Engro Fertilizer Ltd- 2Q Security Analyst Briefing FERTILIZER SECTOR KEY ISSUES – DEALER REGISTRATION • Recently, through budgetary measures, tax regulations have been implemented in sales tax and income tax laws, seeking to increase cost of doing business of manufacturers in case of sales to unregi
Slide 7: Business Challenges: Subsidy and GIDC
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Business Challenges: Subsidy and GIDC Fertilizer industry continues to face challenges in the form of prior subsidy even though the subsidy given on fertilizers was timely passed on to farmers whereas the government is yet to pay back the subsidy (I
Slide 8: Special Items For Discussion
Special Items For Discussion 1. Benefit passed on to farmers 2. Adequacy of Indigenous gas-based production 3. Excess Urea Capacity- Potential for opportunistic exports 4. EFERT- Purpose of Being 5. EFERT-Doing good while doing well 2Q Security Analyst Briefing 2020 www.engro.com
Slide 9: Benefit Passed on to Farmers in the Form of Lower Urea Prices
Engro Fertilizer Ltd- 2Q Security Analyst Briefing BENEFIT PASSED ON TO FARMERS IN THE FORM OF LOWER 1 UREA PRICES The industry has passed almost 3.4x benefit to farmers in terms of lower urea prices versus benefit received in the form of subsidized gas prices Farmer Benefit and Subsidy Comparison o
Slide 10: Indigenous gas-based Urea sufficient to meet demand
Engro Fertilizer Ltd- 2Q Security Analyst Briefing 2 Indigenous gas-based Urea sufficient to meet demand • Agronomic demand for urea would be around 5.8 MT in 2020 if the demand follows last 5-year average • Natural Disasters in the past have resulted in approximately 5% reduction in Urea Sales. • F
Slide 11: Operating LNG Based Plants: Significant Financial Burden on Economy
Engro Fertilizer Ltd- 2Q Security Analyst Briefing 3 Operating LNG Based Plants: Significant Financial Burden on Economy Operating LNG plants will reap economic benefits however this will come at a cost of significant fiscal and current account burden Benefits of operating LNG Plants Burden on Gov’t
Slide 12: Urea Exports: Immediate Solution to Alleviate Increasing Burden of LNG Imports
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Urea Exports: Immediate Solution to Alleviate Increasing Burden of LNG Imports Urea exports could potentially alleviate the burden of operating LNG plants Exports of surplus Urea can potentially generate USD 384M (PKR 64B)* + Potential Government In
Slide 13: Urea Exports: RLNG should be used to allow exports
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Urea Exports: RLNG should be used to allow exports Urea Export price /ton USD 240 RLNG cost per ton (USD USD 66 2.2/mmBTU * 30 index)* Additional Value created USD 174 per ton Exports at current spot RLNG cost can create FX benefit of almost 3.6 tim
Slide 14: Urea has the potential to be the single top exporter
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Urea has the potential to be the single top exporter Urea exports will generate significant foreign inflow and could become the top exporter without any additional investment 450 384* 400 353 350 294 300 273 252 248 238 235 227 227 250 200 150 100 5
Slide 15: EFERT - Our Reason for Being
4 ? EFERT- Our Reason for Being
Slide 16: We grow taste, prosperity, possibilities
we grow taste a promise of growth 40% potato crop fields served we grow prosperity we grow sustainability USD PKR PKR 40% 5 Bn 17 Bn 600 Mn cotton crops annual import served PAT 2011 PAT 2018 substitution we grow possibilities crop protection agri-logistics 2x 5x 4x 790 peak vol. of cartap pace of g
Slide 17: We grow hope & dreams
5 we grow hope & dreams
Slide 18: Artificial limbs program, schools and technical training college
artificial limbs program 100k+ 150+ patients beneficiaries treated impacted since 2005 in 1 month sahara school katcha schools 520 1,500 students students enrolled enrolled technical training college 2,500+ alumni to date
Slide 19: Together we grow Pakistan
together we grow Pakistan
Slide 20: Project Hamqadam
PROJECT HAMQADAM • Hamqadam is an initiative launched in December 2018 aimed to support subsistence level farmers by providing them with interest-free in-kind loans at below market value. NGOs affiliated with Pakistan Poverty Alleviation Fund (PPAF) have been engaged to aid EFERT in field executio
Slide 21: Donation - To Combat COVID-19 in Pakistan
21 Engro Fertilizer Ltd- 2Q Security Analyst Briefing Donation- To Combat COVID-19 in Pakistan Focus on 4 Verticals Prevention: Protecting 1 Testing / 2 frontline staff Diagnostics 3 Patient care and 4 Livelihoods and facilities sustenance • Contributed PKR 66.5 M in April to the Indus Hospital to e
Slide 22: Awards & Recognition - 1H 2020
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Awards & Recognition-1H 2020 35th Corporate ’International Safety Green Leaf Runner-Up Quality Award 2019 8 Green Office Excellence awards held Award Merit’’ & ‘’Country Award Awards in the various by Management Best Joint Award’ categories Associat
Slide 23: Ensuring Food Security in Pakistan through business continuity amid Covid-19
Ensuring Food Security in Pakistan through business continuity amid Covid-19 2Q Security Analyst Briefing 2020 www.engro.com
Slide 24: Continuous Operations to ensure food security in Pakistan
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Continuous Operations to ensure food security in Pakistan…. Preventing spread of infection in control rooms by undertaking relevant safety and hygiene protocols Security Analyst Briefing www.engro.com 1H 2020 24
Slide 25: Supporting Communities to fight Covid-19
Engro Fertilizer Ltd- 2Q Security Analyst Briefing Supporting Communities to fight Covid-19 EFERT distributing food to 1500 families in Fumigation/Disinfecting of nearby villages Holding awareness campaigns on COVID- Disinfection tunnel installed outside the plant’s vicinity and Daharki City 19 and
Slide 26: Thank You Q&A
THANK YOU Q&A Security Analyst Briefing 1H 2020