engro chemical registers profit of rs2.59bn
October 29, 2009
The News - Engro Chemical Pakistan has announced a net profit of Rs2.59 billion for nine months ended September 30, 2009.
This is, however, 22.62 per cent lower than Rs3.35 billion profits it reported in the same period of 2008. ‘The decrease in earnings is mainly attributed to lower margins on Zarkhez and lower dividend income partially offset by higher phosphate sales,’ according to a press statement issued by the company on Wednesday.
Market demand for urea, during the nine months ended September 30, 2009 was 4.7 million tons, an increase of 18 per cent over the same period last year (4.0 million tons). The increase is attributable to two major reasons, which are; better farm economics for wheat which led to increased sowing and sowing of BT cotton which requires greater application of urea over conventional cotton varieties, the statement added.
Domestic production at 3.74 million tons was almost the same as compared to 3.73 million tons during the same period last year, as per the notification. International urea prices declined during the period. Current landed price of imported urea is approximately Rs1,323 per bag ($ 290/ton) as against the domestic price of Rs730 per bag. Keeping domestic prices substantially lower than international prices, the fertilizer industry provided benefit of approximately Rs31 billion to farmers, it said.
Industry wide sale of phosphatic fertilizers increased to 1.13 million tons as compared to 0.30 million tons for the same period last year. The industry demand remained high primarily due to the decrease in phosphate prices. Urea sales were 673,000 tons, down by 15 per cent for the same period last year due to higher inventories carried forward during first quarter of 2008 and lower production during the current period.
ECPL plant produced 689,000 tons during the nine months ended September 30, 2009 against 740,000 tons during the same period last year as a result of a planned turnaround during the second quarter of 2009. The urea expansion project at Daharki site, at 30th month of execution, is progressing satisfactorily, it added. The sale of company manufactured blended fertilizers (Zarkhez and Engro NP) was 72,500 tons against 71,000 tons during the same period last year.
Reduction in sugar cane acreage and reduced availability of financing with sugar cane growers along with higher potash prices, caused a fall in Zarkhez sales which was reduced to 37,800 tons as compared to 54,000 tons during the same period last year.
The company however sold 34,700 tons of its Engro NP fertilizer against 17,000 tons in the comparative period. The company’s sale of imported phosphatic fertilizers, DAP and Zorawar, was 240,000 tons against 54,000 tons for the same period last year as a result of higher market demand due to reduction in international market prices.
Engro Chemicals expects robust urea demand in the backdrop of short supply sentiment which is expected to persist in the near term.
