AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Recent earnings estimates for leading Pakistani fertilizer companies, Fauji Fertilizer Company Limited (FFC) and Engro Fertilizers Limited (EFERT), suggest a challenging first quarter due to a significant decline in sales. Analysts expect a 40% decrease in urea and a 48% drop in DAP sales, affecting the sector’s profitability.
FFC is forecasted to achieve an earnings per share (EPS) of Rs10.2, alongside a dividend of Rs8.0. Despite the lower sales, FFC is projected to outperform its competitors, with a 37% growth in earnings attributed to synergies from a merger and improved profit margins.
In contrast, EFERT’s consolidated earnings are expected to reach Rs2.3 billion, translating to an EPS of Rs1.8 for the first quarter of the calendar year 2025. This marks a 70% year-on-year decline, primarily driven by a 53% reduction in urea sales and increased financing costs. EFERT is anticipated to declare a dividend per share (DPS) of Rs2.0 for the first quarter and Rs24.5 for the full year.
The outlook for the entire year is less optimistic, with lowered earnings estimates for both FFC and EFERT due to weaker demand projections. EFERT is expected to be the hardest hit amid ongoing challenges. Despite an 8% cut in DPS for EFERT and a 13% reduction for FFC, both companies are likely to remain appealing to investors due to their attractive double-digit dividend yields of 13% and 12.5% respectively for the year 2025.