Karachi: EFERT, a significant player in the fertilizer industry, recently held an analyst briefing to discuss its calendar year 2025 results and future outlook. The briefing highlighted the company's struggle with increased costs and inventory challenges, influencing its performance in the fourth quarter of 2025. Despite these obstacles, EFERT declared a final dividend of Rs4 per share, bringing the total annual dividend to Rs15 per share.
According to JS Global, EFERT's fourth-quarter results were impacted by aggressive dealer discounts aimed at clearing inventory and a notable rise in phosphoric acid prices. Despite these challenges, EFERT reported a 10% year-on-year increase in urea offtake for 2025, with a 47% rise in the fourth quarter alone, boosting its market share to 34%. However, sales of Diammonium Phosphate (DAP) fell by 42% year-on-year due to margin pressures, reducing its market share to 13%.
The company also noted potential for urea exports, with inventories reaching 800,000 tons and expected to surpass one million tons. Meanwhile, DAP imports remain on hold, but current supply levels are deemed sufficient to meet near-term demand. EFERT retained cash reserves of Rs19.6 billion for super tax and Gas Infrastructure Development Cess (GIDC) obligations and raised debt to support its $300 million Plant Expansion Fund (PEF). This strategy resulted in a moderated dividend payout ratio of 89%, down from 102% in 2024, indicating a shift towards more sustainable financial distributions. The stock is projected to offer an 11% dividend yield based on estimated earnings for calendar year 2026.
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