Karachi: Fauji Fertilizer Company (FFC), Engro Fertilizers (EFERT), Fauji Fertilizer Bin Qasim Limited (FFBL), and Fatima Fertilizer (FATIMA) have released their earnings for the third quarter of 2024, showing varying results in profitability and operational performance, as outlined by AKD Securities Limited.

According to AKD Securities Limited, FFC showcased a significant year-over-year earnings increase in 3QCY24, posting earnings of PkR14.9bn (EPS: PkR11.7) compared to PkR9.1bn (EPS: PkR4.0) in the same period last year, a 126% increase. This growth is attributed primarily to gross margin expansion, driven by stable gas prices that remain about 50% cheaper compared to peers on the Sui Network. The company also expects to announce an interim cash dividend of PkR9.0 per share.

In contrast, EFERT saw a 15% decline in its earnings for the same period, with 3QCY24 earnings expected at PkR8.2bn (EPS: PkR6.1) compared to PkR9.6bn (EPS: PkR7.18) in the prior year. The drop is largely due to a 33% decline in urea offtakes, a decrease in other income from reduced short-term investments, and a significant increase in finance costs due to rising debt levels. Despite the decline, EFERT is set to declare an interim dividend of PkR6.0 per share.

FFBL’s profitability is also projected to dip slightly by 4% YoY to PkR5.1bn (EPS: PkR3.9), mainly due to a 21% reduction in topline, influenced by a 37% drop in DAP offtakes. However, a notable increase in urea offtakes and improved gross margins, thanks to a higher proportion of urea sales, has helped buffer the impact.

Lastly, FATIMA is expected to report a considerable improvement in earnings, with 3QCY24 figures reaching PkR10.3bn (EPS: PkR4.9), up from PkR7.8bn (EPS: PkR3.7) last year. This increase is mainly due to enhanced gross margins facilitated by reduced costs in urea production and a significant drop in Phos rock prices. Despite the improvement, no dividend announcement is expected from FATIMA.

These varied financial results reflect the dynamic and challenging environment in which these fertilizer companies operate, as they navigate fluctuating commodity prices and market demand to maintain profitability and growth.