Karachi: Engro Fertilizers Limited (EFERT) held its corporate briefing to discuss its financial performance for the first quarter of 2025, revealing a significant decline in earnings and sales volumes. The company reported earnings of Rs2.9 billion, marking a 63% decrease from the previous year, with an earnings per share of Rs2.17 for the quarter.

EFERT's revenue fell to Rs30 billion, a 59% drop compared to the same period last year. This decline was primarily attributed to a decrease in sales volumes, with urea and DAP sales falling by 53% and 71% year-on-year, respectively.

Despite the reduced volumes, the company achieved a gross margin of 35%, an increase of 12 percentage points from the previous year. This improvement was largely due to the absence of imported urea off-take, which had negatively impacted margins in the prior year.

The company's urea market share decreased by 6 percentage points to 24% during the quarter, a result of an overall decline in industry off-take, which fell by 40% to 1.1 million tons.

Management expressed optimism about a potential recovery in urea volumes in the coming months, although they are anticipated to remain below the levels seen last year, expected to range between 6.2 to 6.5 million tons for 2025.

EFERT continues to align its urea discounts with industry off-take dynamics, maintaining its current market price of Rs4,650 per bag, which is significantly lower than the international price of Rs7,920 per bag.

The company also reported a 62% year-on-year increase in borrowings, attributed to higher inventory carry-forwards that affected working capital.

On the development front, the Pressure Enhancement Facility project is progressing, with Phase 1, Scope 1 completed, and Scope 2 expected to finish by the end of the current quarter. Procurement for the second phase is currently in progress.