Engro Fertilizers Ltd. · PSX:EFERT
Engro Fertilizers — FY2019 Earnings Presentation
12 slides from Engro Fertilizers's earnings presentation, 2019
Slide 1: Analyst Briefing FY 2019
ANALYST BRIEFING FY 2019
Slide 2: Business Highlights
BUSINESS HIGHLIGHTS For FY 2019, EFERT’s Profit After Tax (PAT) stood at PKR 16,871 PKR M FY 2019 FY 2018 M vs FY 2018 PAT of PKR 17,414 M Total Revenue 121,355 109,197 Lower profitability was due to: Gross Profit 39,540 35,316 One-off tax impact of higher future Corporate Tax rates introduced
Slide 3: Urea Market Environment
UREA MARKET ENVIRONMENT Urea industry sales for FY 2019 clocked in at 6,183 KT, up by 7% vs SPLY due to Urea Industry pre-buying in anticipation of increase in urea prices post the news of gas price (KT) FY 2019 FY 2018 hike. Channel inventory est. at ~ 400 KT at year end Opening Inv. 183 260 Prod
Slide 4: Phosphates Market Environment
PHOSPHATES MARKET ENVIRONMENT FY 2019 industry sales stood at 2,021 KT vs 2,224 KT in FY 2018 (down 9%). Lower industry Phosphates Market Share FY 2019 offtake was due to increased prevalent prices in FY2019; and poor farm economics especially in cotton crop where output decreased by around 20% 14
Slide 5: Plant Efficiencies Enabled Historic Production despite 2 turnarounds
Plant Efficiencies Enabled Historic Production Plant load improvements coupled with higher gas avails have led to higher production Production K Tons 2050 EFert’s production 2003 2000 1967 this year is the 1950 1928 highest in last 5 years 1900 1881 despite 2 turnarounds 1850 1807 during the year 18
Slide 6: Low Utilization at Base Plant
Low Utilization at Base Plant Lower gas avails have led to lower capacity utilization but ample capacity available Capacity vs Production Sufficient capacity available to cater the demand in Pakistan 2.3 Plant has an 2.0 provided Efert can additional produce incremental 0.6 capacity of 0.3 MT 0.5 ur
Slide 7: Indigenous gas-based Urea supply sufficient to meet demand
Indigenous gas-based Urea supply sufficient to meet demand • Agronomic demand for urea is expected to be around 5.8Mn MT in 2020 in line with the last 5 year average • Opening inventory with industry in 2020: ~200KT • Estimated channel inventory at start of the year: ~400KT • This implies that local
Slide 8: Across the board price reduction serves the interests of Large Zamindars
Across the board price reduction serves the interests of Large Zamindars Uneven farm demographics allow large farmers to benefit from singular policy framework 90% of the farmers have a land holding size 52% of the farm area is held by remaining of less than 12.5 acres 10% of the rich land lords If
Slide 9: Decrease in Urea prices alone cannot guarantee better farm economics
Decrease in Urea prices alone cannot guarantee better farm economics Urea only constitutes ~10% of total farmer input cost Holistic Policy framework should be based on: • Balanced fertilizers usage can Seed, 7% Urea, enhance wheat productivity by 35% Others, 10% 28% and maize productivity by 40% Oth
Slide 10: Awards & Recognition
Awards & Recognition Annual Environmental Excellence Award by “National Forum of Environment & Health” on environmental performance and Million Tree Plantation. Annual Fire Safety Excellence Award by “Fire Protection Association of Pakistan” for exhibiting excellence in fire prevention & safety.
Slide 11: Thank You Q & A
THANK YOU Q&A Security Analyst Briefing FY 2019
Slide 12: Security Analyst Briefing FY 2019
Security Analyst Briefing FY 2019