FFC holds Corporate Briefing for year ended December 31, 2019 · FFC holds Corporate Briefing for...

Preview:

Citation preview

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