By: Syed Nasir Rizvi
(+92-21) 3569 4679
Elixir Securities Pakistan (Pvt.) Ltd
Urea offtake declines 11% in Sept-14
As per statistics released by NFDC today, urea offtake in Pakistan declined by 11% YoY and 33% MoM in Sept-14. Offtake for the local industry fell by 8% YoY while that of NFML declined by 38% YoY. Sales for both major players, EFERT and FFC, displayed a similar trend. Even though closing urea inventory in Pakistan has reached its lowest level since Sept-13, recent media reports regarding government prioritizing gas supplies to players on the SNGP network coupled with ECC’s approval to import 185ktons of urea suggest that the industry should manage to meet demand requirements for the upcoming Rabi season.
DAP market takes a big hit
DAP sales for the industry declined by 48% YoY to 88ktons in Sept-14, bringing 9MCY14 offtake to 700ktons (-8% YoY). DAP offtake for FFBL and ENGRO declined by 48% and 53% YoY respectively in Sept-14.
We like ENGRO and FATIMA
ENGRO and FATIMA are our top picks in the fertilizer space as the former remains a cheap proxy to EFERT’s fundamentals while the latter offers strong earnings growth on the back of deleveraging.