Out of that total, local manufacturers have sold nearly 340,000 tons, up by an impressive 196% over the same month of the preceding year. PHOTO: FILE
Out of that total, local manufacturers have sold nearly 340,000 tons, up by an impressive 196% over the same month of the preceding year, says a research note issued by BMA Capital, an investment bank.
Local manufacturers recorded a sharp recovery in their sales during the first quarter of the 2013 calendar year compared to last year, thanks to lower imports, slightly better gas availability and diversion of gas to Engro’s EnVen plant from its old base plant, says the report.
All these factors will lead to robust growth in profitability for fertiliser firms in the first quarter of 2013, says BMA Capital, taking both Engro and Fauji Fertilizer Bin Qasim out of the red bottom-line posted in the corresponding period last year
“We anticipate Engro to post earnings per share of Rs3 in the first quarter of 2013, Fauji Fertilizer to register 25% YoY growth in earnings to Rs3.8 per share and Fauji Fertilizer Bin Qasim to post earnings per share of Rs0.1 for the period,” the note added.
The fertiliser sector has been in the news most recently due to an inquiry by the Competition Commission of Pakistan into collusive activity in the market. The country’s top antitrust watchdog had slapped a maximum collective penalty of Rs8.6 billion on Fauji Fertilizer and Engro Fertilizers – the two largest urea manufacturers in the country – after both companies were found involved in “excessive pricing of urea”.
However, stock market analyst Fahad Ali, who is associated with JS Global Capital, said: “Investors perceived Engro’s decision to raise urea price as logical, because of the company’s agreement with the government, hence the news did not attract any negative sentiments.”
Engro Fertilizers’ stock closed in the green in trading on Wednesday.
Published in The Express Tribune, April 4th, 2013.
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