Fauji Fertilizer expects stable DAP production in 2025

Fauji Fertilizer Company (FFC) anticipates that DAP production will stay consistent over the course of the upcoming year because DAP has a lower gas intensity than urea.

Addressing an analyst briefing, the management informed that in 2024, the total amount of urea offtake rose to 2.9 million tons, which included 95,000 tons of imported urea. Similarly, the DAP offtake rose to 0.65 million. The FFC market share of DAP grew from 60% to 62% in 2023.

The management revealed that the company has recently introduced its Zinc-Coated Urea line at the FFC Goth Machhi plant, with a production capacity of 100,000 metric tons, while overall urea capacity remains unchanged. This specialized fertilizer, containing 42% nitrogen and 1% zinc, is priced at PKR 5,200 per bag, carrying a premium of PKR 900 over regular urea.

Additionally, the price gap between local and international urea markets stands at approximately PKR 2,735 per bag.

Committed to providing innovative agricultural solutions, the company, under FFBL, also introduced Boron DAP last year.

Expanding Sona Centers

The management disclosed that in order to improve its direct-to-farmer distribution network and give farmers better prices, FFC is growing its Sona Centers around the country.

By 2024, the network had expanded to 73 centers, encompassing one million acres of land and providing services to 75,000 registered farmers. In 2025, FFC intends to expand even more in order to better serve and support the agriculture industry.

In response to questions over possible increases in gas prices, management stated that as the contract with Mari is still in force until 2029, they anticipate Mari’s gas rates to stay the same.

The company is actively working towards Shariah compliance. However, it has not yet attained full compliance due to non-compliant investment income, including dividends. Efforts are underway to meet Shariah requirements.

Moreover, the company currently reports FFBL Power (75% share) and FFL (47.8% stake) as subsidiaries, whereas AKBL (64.7%) and PMP (37.5%) are categorized as associates in accordance with the revised group structure following the merger.

To recall, Fauji Fertilizer Company (FFC) reported a net profit of PKR 64.7 billion for 2024, marking a 118% increase from the previous year’s profit of PKR 29.67 billion.

This surge in profits is largely attributed to contributions from Fauji Fertilizer Bin Qasim (FFBL), which merged with FFC in July.

The earnings per share for 2024 were PKR 45.49, up from PKR 23.32 in 2023. FFC declared a final cash dividend of PKR 21 per share, in addition to the interim dividend of PKR 15.5 already disbursed to shareholders.