Fauji Fertilizer Company Limited (FFC) reported earnings per share of PKR 29.05 for 1HCY26 (1HCY25: PKR 26.06). Meanwhile in 2QCY26, FFC reported EPS of PKR 15.43 (2QCY25: PKR 13.83). Investment and dividend income contributed significantly, with 45% of the bottom line contributed by investment and dividend income. All group investments, including banks, PMP, Thar Energy, wind farms, and Fresh and Freeze, are currently profitable.
The company maintained and grew its market share by 25%, reaching historic highs in Urea and holding a dominant 66% share in the DAP (Diammonium Phosphate) market. Total sales included 276 KT of manufactured DAP and 42,000 tons of imported DAP. FFC launched six specialty crop nutrients in collaboration with Yara International (Norway) and the expansion of Sona Centers represent a shift toward a one-stop shop model for farmers.
These centers showed massive growth, selling 59,000 tons in H1 2026 compared to 15,000 tons in the same period last year. These products are expected to increase crop yields by 7% to 10%. The company is targeting a USD 3 million business from this segment this year. Management noted that the FFC-led consortium has acquired a 66.67% stake in PIA.
The first tranche has been paid. The second tranche is scheduled according to defined timelines. Going forward, despite the outlook for Urea remains positive, the management expects 2HCY26 to be more challenging than 1HCY26. Continued inflationary pressure is expected to hit operating costs. Since 50% of global sulfur is a byproduct of Middle Eastern refineries, geopolitical tensions in the Strait of Hormuz have caused prices to skyrocket.
It is estimated to take three to four months to exhaust expensive inventory. High prices for DAP may lead to softer demand, potentially impacting the agricultural value chain. While there are no current plans to increase Urea prices, the company may reconsider if costs escalate beyond manageable levels.
The company is expecting a total industry Urea offtake of approximately 6.6 million tons for the full year. FFC is maintaining minimal urea inventory due to efficient supply chain management across its 3,600 dealers. The gas situation for associated plants like Agritech has seen disruptions due to geopolitical factors, but operations are expected to smooth out as regional tensions settle.
The company maintained a strong payout ratio for the quarter, and management aims to keep future payouts more or less similar to previous years.
Important Disclosures
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