Provisional fertilizer offtake for the month of Dec’18 indicates that urea sales witnessed a meager decline of 1% YoY to 709k tons while this figure is up by 43% MoM. Cumulatively, urea sales remained stagnant in CY18 at 5.8mn tons.
In particular, FFC and FFBL’s cumulative urea offtake recorded a decline of 25% YoY to 326k tons in Dec’18 while surged by 31% on a MoM basis.
Whereas cumulative FFC and FFBL urea sales during CY18 posted a 1% YoY increase to 3.1mn tons. Likewise, EFERT’s urea offtake jumped up by 12% YoY and 3% MoM to 209k tons during Dec’18.
Meanwhile on a YoY basis, company’s urea offtake posted an 11% growth to 2.0mn tons during CY18. Finally, FATIMA’s sales escalated by a stunning 23% YoY and 44% MoM in Dec’18 to 110k tons. On a cumulative basis, FATIMA group’s sales declined by 12% YoY to 589k in CY18.
Growth in DAP offtake noted at 17% YoY while down by 34% MoM in Dec’18
DAP sales depicted a 17% YoY increase to 175k tons while this figure is down by 34% MoM in Dec’18.
Analysts at Arif Habib Limited said that during full year CY18, DAP sales showed a 7% YoY increase to clock-in at 2.2mn tons.
On a company specific basis, DAP offtake of FFC and FFBL arrived at 105k tons in Dec’18, translating into a YoY increase of 9% while down by 12% MoM. During CY18, offtake for DAP of FFC and FFBL declined by 14% YoY to 714k tons.
On the other hand, EFERT’s DAP sales registered a decline of 29% YoY and 73% MoM in Dec’18 to 22k tons. However, during CY18 EFERT posted a solid growth of 15% YoY to 602k tons.
By the end of CY18, closing inventory of urea with local producers stood at 78k tons while imported urea inventory is 85k tons. Meanwhile, DAP inventory position is 588k tons in the same period (FFBL + FFC, EFERT and Pvt importers held approximately 257k, 95k and 144k tons, respectively).
Earnings estimate & Outlook
Based on provisional offtake figures, we expect FFC to post earnings growth of 18% YoY in CY18 to PKR 9.94/share.
Moreover, EFERT’s profitability is expected to surge by 64% YoY to PKR 12.19/share. Likewise, FFBL is expected to post an EPS of PKR 1.77/share during CY18, displaying a jump of 61% YoY.