Karachi, August 01, 2023 (PPI-OT): EFERT just held its corporate briefing session to discuss the 1HCY23 results
To recall, the company posted a consolidated PAT of PkR1.1bn/PkR5.5bn (EPS: PkR0.79/ sh/PkR4.09/sh) for the 1QCY23/1HCY23. The major factor eating away the bottom line remained the newly levied super tax through the FY24 Finance Act. An interim dividend of PkR3.0/sh was also paid out for the outgoing quarter, taking total 1HCY23 dividend pay out to PkR6.5/sh.
The company booked a hefty PkR3.8bn tax charge on account of super tax alone, creating an effective charge of ~85.1% on its PBT. For perspective, the company mentioned that without the said charge, EPS would have been PkR4.80/sh (?9.1% QoQ).
Further, the retrospective part of the tax may be challenged legally.
5% FED on all fertilizers, plus an additional 5% GST levy on DAP has been implemented and passed on final prices (PkR175/bag increased effective 1st July on urea, representing PkR150/bag for FED pass on and PkR25/bag on account of dealer margin).
The base plant experienced a 21-day unplanned outage during the quarter, and such issues have been taken up by the BoD to mitigate any future lost production days. No material change in urea sales (?~5% against SPLY and market share remained in the 33% region) but DAP sales declined by ~15% (market share at 18% vs. 22%) against SPLY due to high prices owing to PkR devaluation, despite falling international prices.
Market size for urea is expected to be at 6.5MT and DAP should remain in the region of 1.3-1.4MT annually, as per the company.
Despite being on the Mari network, the company receives concessionary gas at PkR510/mmbtu in contrast to PkR302/mmbtu Mari gas price at the Enven plant, and the Base plant majorly runs on the costlier PP-12 dollarized price.
No major turnarounds are planned for the remaining half of the year.