The fertilizer sector in Pakistan experienced a decline in Urea sales in May 2024, with total sales clocking in at 392,000 tons, down 15% year-over-year (YoY). However, this figure shows a 20% month-over-month (MoM) increase due to a low base in April.
The key figures are as following,:
| Company | Feb-24 | Mar-24 | Apr-24 | May-24E | YoY | MoM | 5MCY24E | YoY |
|---|---|---|---|---|---|---|---|---|
| FFC | 228 | 293 | 188 | 230 | 11% | 22% | 1,173 | 21% |
| EFERT | 197 | 215 | 75 | 77 | -34% | 2% | 775 | -6% |
| FFBL | 12 | 21 | 35 | 55 | 62% | 55% | 155 | -3% |
| FATIMA | 74 | 102 | 26 | 15 | -79% | -43% | 315 | 21% |
| Others | 33 | 40 | 2 | 15 | -44% | 755% | 128 | -53% |
| Total | 543 | 671 | 327 | 392 | -15% | 20% | 2,546 | 2% |
DAP off-take for May 2024 is projected to be around 34,000 tons, showing a significant drop of 48% YoY and 63% MoM. The breakdown for DAP sales is as follows:
| Company | Feb-24 | Mar-24 | Apr-24 | May-24E | YoY | MoM | 5MCY24E | YoY |
|---|---|---|---|---|---|---|---|---|
| FFC | 17 | 0 | 29 | 6 | -32% | -79% | 53 | 59% |
| EFERT | 25 | 21 | 10 | 2 | -85% | -80% | 95 | 37% |
| FFBL | 63 | 78 | 52 | 24 | -39% | -54% | 246 | 26% |
| FATIMA | 3 | 2 | 0 | 1 | NM | NM | 6 | -69% |
| Others | 7 | 5 | 1 | 1 | -77% | -30% | 16 | -64% |
| Total | 115 | 107 | 93 | 34 | -48% | -63% | 415 | 15% |
Fauji Fertilizer Company (FFC) and Fauji Fertilizer Bin Qasim Limited (FFBL) have reduced DAP prices by Rs1,800 per bag. The new prices are Rs11,141 per bag for FFC and Rs11,191 per bag for FFBL. This adjustment aims to align local prices with international DAP prices amidst declining demand, potentially impacting FFBL’s margins.
The fertilizer sector continues to offer stable dividends, with FFC and EFERT rallying 22% and 42%, respectively, year-to-date (YTD). FFC is favored for its favorable market dynamics and is expected to provide a dividend yield of 19% for CY24E.
| Company | P/E (x) | D/Y | Market Cap (Rs mn) | CY24E | CY25F |
|---|---|---|---|---|---|
| FFC | 3.72 | 3.54 | 18% | 19% | 175,722 |
| EFERT* | 6.26 | 5.48 | 16% | 18% | 212,326 |
| FFBL | 3.58 | 3.60 | 6% | 8% | 40,662 |
Disclaimer:
The information in this article is based on research by JS Global. 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.
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