FFC holds Corporate Briefing for year ended December 31, 2019
Fauji Fertilizer Company (FFC), held Annual Corporate Briefing for the year
ended 31st December 2019, as a part of its best corporate governance
practices.
FFC has been recognized by Pakistan Stock Exchange (PSX) as first amongst
top 25 companies consecutively for 9 years attributed to its Compliance of
Code of Corporate Governance, Company Performance and efficient
management which has consistently surpassed established corporate
governance standards
.
In the same backdrop the subject briefing for year 2019 was held at FFC’s
corporate Head Office in Rawalpindi where prominent capital market
analysts and dignitary from PSX Mr. Saquib Ali also attended the event.
Company Secretary FFC, Brig Ashfaq Ahmed SI(M) (Retd) opened the
meeting and apprised the house about significance of the event. Chief
Financial Officer FFC, Mr. Mohammad Munir Malik briefed the house about
FFC’s performance for the year 2019 and answered various questions raised
from the forum.
Corporate BriefingFor the year ended
December 31, 2019
March 2, 2020
Review
2019
Projects
Future Outlook
/ Challenges
Q & A
Session
FAUJI FERTILIZER COMPANY LIMITED
2
2019 Review
Business Environment - 2017
Business Environment – 2019
The year commenced with industry
urea inventory of 170 thousand
tonnes - 40% lower compared to
2018.
DAP inventory of 570 thousand
tonnes carried into 2019 - the
highest ever.
Freight cost increased due to implementation
of Axle Weight Regime.
The increase in gas cost not passed on
immediately in view of Government offer of
reduction in GIDC rates effective July 01, 2019.
Had to absorb major part of gas cost in third
quarter of 2019 as Government could not fulfill its
commitment.
Substantial
increase in
Gas rates
effective July
01, 2019.
Continued challenges of delays in receipt of
subsidy and realization of GST refunds.
4
Reduction in GIDC
GIDC levy
reduced from
the month of
January 2020
by Rs.400/bag.
This reduction has
no impact on GIDC
levied previously
which is sub-judice
to Court
proceedings.
Although the Company
had been absorbing major
part of this levy over the
years, the Company
reduced urea selling
prices by Rs. 375/bag for
the benefit of the farming
community.
5
2019
28
2,720
105,783
Urea Production (KT)
Urea Inventory(KT)
Total Fertilizer Sales (KT)
Revenue–Including Subsidy (Rs.M)
3
3,030
108,365
674
17,110
35,567
13.45
Savings through import
Substitution (US $ M)
Net Profit (Rs M)
Equity (Rs M)
650
14,439
33,383
11.35
EPS (Rs / Share)
FFC 2018 vs 20192018
2,492
6
2,408
2,403
2,469
2,523
2,513
2,522
2,492
2,000 2,200 2,400 2,600
2013
2014
2015
2016
2017
2018
2019
Sona Urea Production (KT)
7
2,4
09
2,3
71
2,4
08
2,4
26
2,6
97
2,5
27
2,4
67
81
140 181 212
526 503 253
74 81 86 80
97 108 106
-
20
40
60
80
100
120
-
1,000
2,000
3,000
4,000
2013 2014 2015 2016 2017 2018 2019
Rs
in
billio
n
'00
0' t
on
ne
s
Sales Qty - Urea Sales Qty - Imported Fert Revenue (Incl Subs)
Offtake & Revenue –2019
8
5,903
5,618
5,585
5,500
5,816
5,810
6,230
- 1,000 2,000 3,000 4,000 5,000 6,000 7,000
2013
2014
2015
2016
2017
2018
2019
Industry Urea Sales (KT)
- Domestic Sales Only
9
40%
8%
32%
12%
8%
FFC FFBL Engro Fatima Others
FFC marketed 2,467 KT of Sona Urea (Prilled) and captured a market share of 40%.
9%
2018
43%
10%
34%
11%
2%
2019
Domestic Urea Market Share
10
FAUJI FERTILIZER COMPANY LIMITED
14%
14%
63%
9%
FFC Engro Fatima Others
2%
5%
43%
50%
2018 – 285 KT 2019 – 170 KT
Urea Market Inventory Share
11
FAUJI FERTILIZER COMPANY LIMITED
International Vs Local Price
1,815 1,670
2,020
1,950
1,400 1,400
1,700
1,990
1,615
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000J
an
-12
Au
g-1
2
Ma
r-1
3
Oc
t-1
3
Ma
y-1
4
De
c-1
4
Ju
l-15
Fe
b-1
6
Se
p-1
6
Ap
r-1
7
No
v-1
7
Ju
n-1
8
Ja
n-1
9
Au
g-1
9
Ma
r-2
0
Rs
pe
r b
ag
International Price Domestic Price
12
“Overall Winner” ICAP
/ICMAP Best Corporate Report
Awards - 2018
(12th Overall top Position)
Winner ofICAP/ICMAP
“Best Sustainability Report Award”
for 2018 in the Large National Category
For the 4th time
First position in the “Manufacturing Sector” of SAFA
Best Annual Report Awards
2018
1st position in the “PSX Top
25 Companies”
for 9 consecutive
years
Gold Medal as “Industry
Stewardship Champions
2019” by International
Fertilizer Association
“Best company of the year”
award for 2018 by the Rawalpindi
chamber of commerce &
industry7th consecutive year
“Corporate Excellence Award“award for 2018 by the Management
Association of Pakistan
5th consecutive time
Corporate Awards
13
Thar Energy Limited
(TEL), an associated
company of FFC, is
a CPEC Project,
currently under
construction at Thar
Coal Block II. Commercial
operation of
the project is
expected in
the year
2021.
Government of
Pakistan has
notified the
achievement of
Financial Closing
by TEL on 30th
January, 2020.
Thar Energy Limited
15
Future Outlook/Challenges
Poor farm economics due to
lower crop yield , reduction in
cultivable land and other
economic factors
Delay in receipt of subsidy /
GST refund4
1
Depleting gas reserves
need alternate raw material
resource2
Minimum Tax - impacting
margins of imported fertilizers6
Unfavorable settlement of sub-
judice GIDC case may lead to
substantial finance cost5
Pricing pressure due to
governmental intervention 3
Increased transportation cost
due to Axle Weight Regime8
Undue onus on the industry for
registration of dealers under Sales Tax
Act, resulting in increased company
cost
7
Future Outlook / Challenges
17
Thank you
