Islamabad 6 August: Engro Fertilizers Limited (EFERT) held its 1HCY25 analyst briefing to review its financial performance for the first half of 2025 and outline its future outlook.
The company reported consolidated earnings of PKR 8.5 billion (EPS: PKR 6.34), a 10% year-on-year decline from PKR 9.4 billion (EPS: PKR 7.06) in the same period last year, primarily due to lower sales volumes of urea and diammonium phosphate (DAP).
Despite the earnings dip, EFERT showcased significant improvement in gross margins, rising to 32.9% from 22.3% in 1HCY24. The enhanced margins were attributed to the absence of EnVen plant turnaround costs and reduced expenses related to imported urea, which bolstered operational efficiency. The company’s focus on plant optimization, following a USD 50 million investment in prior years, has sustained its industry-leading production efficiency, with plans to maintain consistent output in 3QCY25, mirroring last year’s levels.
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EFERT’s management highlighted a stable market position, with a 33% urea market share in 1HCY25, slightly down from 34% in 1HCY24, and a DAP market share of 20%. The company anticipates a rebound in DAP demand, projecting a market size of 1.3–1.4 million tons by year-end, with EFERT’s share expected to rise to 23–25%. Urea sales for 1HCY25 stood at 1.03 million tons, compared to 1.09 million tons in 1HCY24, while the industry urea market is projected to reach 6.5 million tons by the end of 2025.
The briefing also addressed challenges, including a high inventory buildup earlier this year, which management expects to normalize within six months due to seasonal demand. EFERT recently issued a short-term Sukuk to manage liquidity needs amid increased short-term borrowing. Despite financial pressures from a 10% super tax impacting prior earnings, the company remains optimistic, supported by its ‘AA’ long-term and ‘A1+’ short-term ratings from the Pakistan Credit Rating Agency, reflecting strong fundamentals and Engro Holdings’ backing.
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Looking ahead, EFERT is focused on sustaining its competitive edge through operational efficiency and prudent financial management. The company’s stock (PSX: EFERT) closed at PKR 206.89, up 1% in the past 24 hours, with analysts projecting a target price of PKR 252.00, signaling confidence in its growth potential.
