Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — FY2014 Earnings Presentation
11 slides from Engro Fertilizers's earnings presentation, 2015
Slide 1: Analyst Briefing Full Year 2014 Business Results
Analyst Briefing Full Year 2014 Business Results Security Analyst Briefing Full Year 2014
Slide 2: Urea Market Environment
U REA M ARKET E NVIRONMENT Domestic urea production rose by 1.3% on a YoY Urea Industry (MT) 2014 2013 basis in 2014; led by better gas supply Opening Inventory 0.3 0.4 Overall urea sales slipped by 4.5% YoY in 2014. This was primarily due to lower sales in 2Q and 4Q Production 4.9 4.8 • 2Q sale
Slide 3: Urea Market Environment: Market Share
U REA M ARKET E NVIRONMENT 2014 2013 13% 18% 26% 7% 32% 6% 1% 1% 1% 4% 46% 45% EFERT FFC Agri Tech DH Fatima NFML EFERT FFC Agri Tech DH Fatima NFML Market share of imported urea fell amid higher domestic production and farmer / dealer preference for branded urea – branded urea market share at 87%
Slide 4: Urea Market Environment: International vs Domestic Prices
U REA M ARKET E NVIRONMENT Int’l urea prices (benchmark China) averaged USD Int’l vs. Domestic Urea (PKR/bag) 322/ton (CFR Karachi) in 2014, equivalent to local 2,900 cost of PKR 2,264/bag vs average local price of PKR 2,700 2,500 1,793/bag (21% discount) 2,300 2,100 Current China price, CFR Kar
Slide 5: Zarkhez Market Environment
Z ARKHEZ M ARKET E NVIRONMENT In 2014 international DAP prices averaged USD Phosphate Prices (USD/T) 463/Ton (CFR), 4% lower YoY 600 550 MOP prices averaged USD 295/ton (FOB), 24% 500 lower YoY (USD 388/Ton for 2013) 450 400 The domestic DAP market increased by 5% in 2014 350 1Q 2013 2Q 2013 3
Slide 6: Gas Update
G AS U PDATE Both plants operating since July 2013 due to availability of Gas Available Days temporary gas from Mari Shallow / Guddu. 2014 was first (2 Plant Operation) full year of 2 plant operation 400 350 Engro Fertilizers entered into an agreement with GENCO-II 300 (endorsed by ECC) to insta
Slide 7: Business Highlights
B USINESS H IGHLIGHTS TRIR remained at a low of 0.10 Engro Fertilizers 2014 2013 Engro Fertilizer Ltd 2014 PAT stood at PKR 8,208 M Revenue (PKR B) 61.4 50.1 vs PKR 5,497 M in 2013 Gross Profit (PKR B) 22.6 22.1 In 4Q 2014, PAT rose to PKR 2,697 M vs PKR 2,136 PAT (PKR B) 8.2 5.5 M in 3Q 2014
Slide 8: Financial Highlights
F INANCIAL H IGHLIGHTS Financials (PKR M) 2014 2013 Sales (KT) 1,818 1,599 Lower urea margin due to incomplete pass through of Revenue 61,425 50,129 GIDC hike (Dec 2013) resulting in COGS (38,822) (28,008) lower Gross Profit per ton Gross Profit 22,603 22,121 SG&A (5,213) (4,112) Significant dec
Slide 9: Deleveraging
D ELEVERAGING Debt Level (PKR B) 75 Moratorium on payments First set of early payments 70 due to restructuring 70 PKR 0.6 Bn 67 67 66 repayment of E-Corp loan Amounts in Billions PKR 65 $7M IFC conversion USD sweep 59 to E-Corp Shares of PKR 1.0 Bn 60 $5M IFC Conversion to E-Fert Shares 55 Second se
Slide 10: Outlook
O UTLOOK 2015 global urea demand likely to remain steady; supply expected to trend higher, with (1) new capacity coming up in Algeria and Egypt and (2) change in China’s export regime Global urea prices expected to remain stable in 1H 2015 and could dip somewhat in 2H 2015 as supply additions ra
Slide 11: Q&A Thank You
Q&A Thank You Security Analyst Briefing Full Year 2014