Fertilizer Industry: Earnings Preview for 1QCY24

JS Research has just released an update on its coverage of the fertilizer industry’s earnings for the first quarter of 2024. Here are the key points from the report:

Overview

The fertilizer industry is expected to see improved profitability in the first quarter of 2024 compared to the same period last year. Despite some challenges such as higher gas rates and the impact of selling imported urea, companies like FFC, EFERT, and FFBL are anticipated to report growth in earnings.

Profitability Outlook

• FFC: Expected to witness a 40% year-on-year increase in earnings to Rs8.50 per share. The company’s low gas costs compared to peers are favorable, although negative margins from selling urea may impact earnings.
• EFERT: Projected to report consolidated earnings of Rs5.00 per share, marking a 52% year-on-year growth. The company’s gas costs are expected to be booked at revised rates, and the sale of imported urea may have affected margins.
• FFBL: Anticipated to post earnings of Rs3.00 per share, a significant recovery from a loss of Rs4.20 per share in the same period last year. Higher volumes and improved margins contribute to this recovery.

Dividend Expectations

• FFC: Expected to announce an interim cash dividend of Rs5.60 per share alongside its quarterly results.
• EFERT: Likely to declare a cash dividend of Rs5.00 per share for the first quarter of 2024.
• FFBL: Not expected to announce any dividend with the results.

Earnings Estimates

Company	EPS (Rs)	DPS (Rs)
FFC	8.50	5.60
EFERT	5.00	5.00
FFBL	3.00	–

Conclusion

Despite challenges such as higher gas rates and the impact of selling imported urea, the fertilizer industry is expected to see improved profitability in the first quarter of 2024. Companies like FFC, EFERT, and FFBL are poised to report growth in earnings, with dividend announcements expected from FFC and EFERT.

Disclaimer

The information in this article is based on research by JS Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.