Fertilizer profits set to bloom 17% YoY, EFERT, FFC likely to announce Rs4 & Rs11.5 dividends

July 09, 2025 (MLN): Pakistan’s fertilizer sector earnings are forecast to rise 17% YoY and 67% QoQ in 2QFY25, driven by stronger urea and DAP offtakes during the Kharif season despite subdued farm economics and water shortages, with Engro Fertilizers (EFERT) likely to announce a second interim dividend of Rs4 per share and Fauji Fertilizer (FFC) expected to declare Rs11.5 per share, Topline Securities said in a report released today.

Urea offtake is projected to climb 3% YoY and 14% QoQ to 1.25 million tons, while DAP volumes may jump 16% YoY and nearly double QoQ to 298,000 tons.

Average urea prices fell 7% YoY to Rs4,477 per bag as companies offered discounts to protect market share, whereas DAP prices gained 8% YoY to Rs12,525 per bag.

Gross margins are likely to stabilize at 34.63% in 2QFY25 vs 33.76% a year earlier. Meanwhile, sector finance costs are seen down 22% YoY, with effective tax rates easing to 39%.

Topline maintained a Market-Weight stance on the sector.

Engro Fertilizers (EFERT) earnings are expected to soar 4.3x YoY to Rs4.25 per share in 2QFY25, helped by a turnaround in offtake and margins after last year’s major plant shutdown. Sequentially, profits may double on robust seasonal demand. A second interim dividend of Rs4 per share is likely.
Fauji Fertilizer (FFC) may report a slight 2% YoY decline in earnings to Rs15.04 per share due to lower urea sales, though profits could rise 61% QoQ on stronger volumes and higher other income. A Rs11.5 per share dividend is anticipated.