Karachi, October 08, 2021 (PPI-OT): ICI: Corporate briefing session key takeaways
ICI Pakistan Limited (ICI) held its corporate briefing session yesterday to discuss FY21 results and outlook of the company. We present key takeaways from the session.
ICI Pakistan Limited (ICI) announced its FY21 result on 5th August, 2021 wherein the company posted consolidated earnings of Rs5.3bn translating into an EPS of Rs60.3. Primary reason for the increase in company’s profitability was better operating level performance where the major contribution was from the Polyester and PowerGen segments. The company had announced a final cash dividend of Rs20/share alongside the result, which was in addition to the interim dividend of Rs20/share, taking the full year pay-out to Rs40/share.
Soda Ash
Company’s Soda Ash segment achieved its highest ever export sales volume in FY21 at 33mn tons, a 50% YoY growth. ICI expects double digit growth in Soda Ash vertical in FY22 as well. The local Soda Ash market is around 600k tons currently where ICI is a major player in the sector with a capacity of 425k tons/annum. The company has an expansion of 135k tons/annum underway with an estimated CAPEX of Rs11bn. The expansion is to be completed in 2 phases with 75k tons (est. capex Rs7bn) to be added by Jun-2022 and further 60k tons (est. capex Rs4n) by Dec-2022.
Polyester Fibre (PSF)
ICI’s market share in PSF slightly declined to 22% during FY21. Total production was 135ktons/annum during FY21, wherein polyester fiber market increased from 443k tons to 570k tons due to healthy textile exports. The company is setting up a Recycled Polyethylene Terephthalate (RPET) unit at Sheikhupura with a production capacity of 16k tons/annum, the plant is expected to come online by FY22 end.
Pharmaceuticals
The Pharmaceutical segment climbed 2 places in rankings this year to stand at number 19 in the Pharma industry which has a total market size of ~Rs525bn. The company launched 6 new products in the outgoing year in addition to 8 new products launched during FY20.
Animal Health
The Animal Health segment has 3 operations; Cattle Feed, Silage and Medicines with a total capacity of 3.8mn tons/annum. Management is focusing on the localization of manufacturing for improved margins. Company plans to further strengthen the Farmer’s choice brand, expand into the Silage market and enhance market share in the Cattle Feed segment.
Nutrition
The company plans to focus on the Infant Nutrition businesses going forward and has plans to launch new products to improve capacity utilization. Morinaga is a major player in the formula milk segment after Nestle, with an 11% estimated market share based on volume. ICI has invested a further 11% stake at a cost of Rs770mn in NutriCo Pakistan Pvt Ltd, increasing the shareholding to 51% from 40% previously. The company has decided to merge its two subsidiaries, NutriCo Morinaga Pvt Limited and Nutrico Pakistan Pvt Limited in to a single entity. ICI’s total shareholding in the newly merged subsidiary NutriCo will remain at 51%.