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Morning Briefing for April 09, 2014 – Standard Capital

Karachi, April 09, 2014 (PPI-OT): Fertilizers sector |Rabi off-take review:

Fertilizer’s off-take during Feb 14:
As per the latest data released by National Fertilizers Development Centre total nutrient off-take during Feb 14 was about 268 thousand tones, showed growth of 17.1% YoY against Feb13 off-take which is mainly due to good agricultural condition within the country.

According to Standard Capital, Likewise Phosphate and DAP off-take showed massive jump during Feb 14 and off-take was surged by 241.3% and 336.5%YoY respectively against last year same period off-take. On the other hand Nitrogen off-take and urea off-take was decreased by 1% and 9.6% YoY respectively during Feb 14. During Feb 14 industry managed to post 378 thousands tones as urea off-take during month of Feb 14.

CY13 financial review:
CY13 proved to be a better calendar year for overall fertilizer industry in term of fertilizers off-take and price hike which leaded to overall increase in top line by 17% YoY and posted Net sales of Rs 212 trillion in CY13 against 182 trillion sales reported in CY12. The availability of gas for production plants and demand created from the good agricultural sector was the main reason behind the increase in sales.

Overall industry gross margin was soared by 200bps to 43% during CY13 .Fertilizer industry managed to post higher 38% YoY PAT during CY13 due to decrease in cost of operations and finance cost for the year CY13. Overall industry managed to post 18% Net profit margin during CY13.

Gross margi n % 46.36 26.65 58.49 44.13 16.3
NPAT margin % 27.03 10.31 20.7 10.97 75.02
Latest EPS Rs 15.83 6.01 3.82 5.4 0.89
P/E times 6.88 7.40 10.46 13.27 102.65
Price to BV times 5.51 3.01 2.09 2.91 2.26
ROE % 97.49 78.96 14.67 21.93 2.83
ROA % 40.50 26.80 5.39 5.00 36.61
Dividend Rs 15.35 5.00 2.00 – 1.00
Dividend yield % 13.57 11.76 6.25 – 1.10

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