EFERT's PEF Phase-I hits 60% milestone, Phase II set for launch in 2025

February 23, 2024 (MLN): Engro Fertilizers Limited (PSX: EFERT)’s Pressure Enhancement Facility (PEF) Project Phase-I is nearing 60% completion by the end of CY24 while the preparations for Phase II are underway, anticipating the commencement by the end of 2025.

This was shared by the management of EFERT during its corporate briefing session yesterday.

This project is a framework agreement for the installation of Pressure Enhancement Facilities (PEF) at Mari Gas Field, Daharki, Sindh amongst FFC, ENGRO, and FATIMA.

The project involves the construction of pipeline infrastructure, optimizing the surface pipeline network, and installation of compressors within the Mari Field.

The house was also informed that around mid-April 2024, the Enven plant is slated to undergo a turnaround operation expected to extend for roughly two months.

The project's main aim is the replacement of boilers, for which waste heat boilers have already been acquired.

The total project CAPEX is projected to be between $45-50 million, with certain expenses already accounted for.

About the recent gas price hike, the management appreciated this much-needed step of government.

However, stressing the importance of uniformity in gas pricing to tackle the existing disparity, the management highlighted that 60% of stakeholders access gas at Rs1,597/MMBtu, while the remaining 40% obtain it at Rs580/MMBtu.

In response to the anticipated increase in UREA prices, management remarked that they have sufficient time to implement adjustments.

This is because the new gas pricing, effective from March 2024 for EFERT, will come into effect following the retirement of the concessional gas tariff of US$0.7/MMBTU.

Additionally, the management also discussed EFERT's market share, indicating that the company raised its Urea market share to 35% in CY23 compared to the 29% reported in CY22.

Conversely, EFERT witnessed a decline in its DAP market share, dropping to 18% from 23% in CY22.

Apprising investors regarding the financial performance of the company, the management highlighted that the profit after tax clocked in at Rs26.19 billion [EPS: Rs19.61] in 2023 compared to a profit of Rs16bn [EPS: Rs11.98] in 2022.

This increase reflects efficiency through cost optimization, and increased production from the long-term reliability projects executed during 2022.

The earnings in dollar terms, however, registered negative growth compared to 2017-2021 earnings.

Along with the results, the company declared a final cash dividend for the year at Rs8 per share i.e. 80%.

The management ensured that the company would continue the current payout policy unless BoD decided otherwise.

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