KARACHI: Results for nine months of the current calendar year were released by Engro Fertiliser Limited and Fauji Fertiliser Bin Qasim on Thursday, which gave an insight into the performance of the Fertiliser sector.

Engro Fertiliser Limited (EFERT): The company announced profit after tax at Rs5.51 billion, representing earnings per share at Rs4.19 for nine months of the calendar year 2014.

It showed stellar growth of 70 per cent from PAT at Rs3.23bn and eps at Rs2.46 in the corresponding period of the previous year.

“The company’s profitability stems from 25pc year-on-year increase in urea off-take owing to increased urea production, as company for the major part of 9MCY14 had been operating both its plants,” commented investment analyst Munib Mujeeb Jilani at AKD Securities.

He attributed topline growth at 27pc YoY in 9MCY14 at Rs43.7bn, compared with Rs34.4bn YoY, to continued gas supply from Mari gas (diverted from Guddu Thermal Power Plant) and 29pc YoY decrease in finance cost to Rs4.96bn in 9MCY14 on account of early payments.

Mohammad Tahir Saeed at Topline Securities, however, pointed out that cost of sales surged by 42pc to Rs27.8bn compared to Rs19.6bn in 9M2013 on account of higher gas infrastructure development cess (GIDC) from Jan 2014.

“Moreover, finance costs plunged by 29pc to Rs4.9bn from Rs6.9bn due to debt repayment and exchange gain on dollar-denominated loans,” said analyst Saeed. Other income increased by 171pc to Rs1.7bn during 9M2014.

Fauji Fertiliser Bin Qasim (FFBL): The company recorded PAT at Rs1.77bn or eps at Rs1.90 in 9MCY14, down 49pc YoY from Rs3.45bn (eps: R3.70) in the same period last year.

In addition to this, 3QCY14 results were accompanied by interim dividend per share at Rs0.75 which along with interim dividend at Rs1 paid earlier took the 9MCY14 payout to Rs1.75. Analyst Imran Ahmed Patel at Global Securities commented that the earnings were “slightly lower than our estimates of Rs1.88bn.”

The analysts thought that lower earnings were due to higher financial charges booked by the company during 3Q CY14.

The company posted sales of Rs28.7bn during 9MCY14, down by 15pc compared with revenues of Rs33.78bn during same period last year.

“The decline can mainly be attributed to falling DAP and urea off-take by 15pc and 9pc YoY, which was due to lower production on account of higher gas curtailment during current calendar year,” observed analyst Patel.

Published in Dawn, October 24th, 2014