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BR Research: Fertilizer


National Fertilizer Development Centre (NFDC) released the latest fertiliser statistics for February 2012 and the picture it paints is anything but rosy. Farmers did not queue up to buy much urea during February 2012 as only 160,000 tons were sold - the lowest in 25 years. There does not seem to be any apparent reason for this drastic drip on urea off-take as prices remained pretty much intact at the previous months level.
Much is said about Pakistans agriculture sector and the farmers ever improving economy, but it has to be said that the pressures they faced in 2011 outdid the gains they made from whatever little improvements there were in terms of increases support price.
Fauji Fertilizer Bin Qasim (FFBL) registered its highest ever yearly profits, crossing Rs.10 billion for CY11. The financial result was slightly above the market estimates, yet the share price failed to register a sizeable increase, it rather witnessed a slight dip as the market foresees the rosy times to be over for the Company.
Such has been the frenzy over the prevailing natural gas crisis that major focus has been diverted to either CNG strikes or industrial closures, almost neglecting the massive hike that fertiliser companies have witnessed at once in their feedstock gas prices.
The National Fertilizer Development Centre released the fertiliser statistics for November 2011 and the picture painted is far from satisfactory. Urea off-take for the month has fallen by 30 percent of the 5-year average off-take for November. The skyrocketing prices of urea in the wake of gas curtailment have certainly caught up with the farmers, which is why buying remained dull in a month where it has traditionally been on the higher side.
Stupendous, marvellous and outstanding: Find more such adjectives and they all fit well with the Fauji Fertilizer Company (FFC). You would not find an investors portfolio that does not have a good chunk of FFC shares in it as the fertiliser giant continues to smash its previous earnings records quarter after quarter.
Engro Corporation despite being in never-ending trouble with its new urea plant registered an impressive 9MCY11 performance with an astounding increase of 34 percent in earnings, year on year. The company registered record revenue touching Rs.800 billion with the fertiliser business at its core contributing a significant share of 28 percent.


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Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
Trade Balance $-2.807 bln
Exports $1.911 bln
Imports $4.718 bln
WeeklyOctober 23, 2014
Reserves $13.465 bln