Agritech’s sales surge in 9M2924 despite industry challenges

Pakistani fertilizer company Agritech Limited reported a significant increase in sales during the first nine months of 2024, despite facing substantial challenges, including a net loss. As Pakistan’s largest manufacturer of Granulated Single Super Phosphate (GSSP), Agritech holds a dominant market share and plays a crucial role in supporting national agriculture.

Despite recording a loss of PKR 2.08 billion ($7.44 million), Agritech showcased an impressive operational capacity, producing 274,000 metric tonnes of urea against an installed capacity of 324,000 metric tonnes. This production marked an increase from the 195,000 metric tonnes produced in the same period last year. The sales figures for urea slightly increased to 194,000 metric tonnes from 193,000 metric tonnes year-over-year.

The company experienced a decline in phosphate sales, which dropped by 14% to 556,000 metric tonnes of P2O5 Nutrients, primarily due to diminished farmer affordability and escalating market competition. However, phosphatic fertilizer production rose by 37% to 445,000 metric tonnes, showcasing the company’s capacity to adjust to market demands effectively.

Further emphasizing its commitment to growth and efficiency, Agritech announced the expansion of its GSSP Plant and the construction of a new Sulphuric Acid Plant. These developments are aimed at enhancing the granulation capacity of the SSP plant and improving production and energy efficiency at the urea plant.

In terms of financial performance, the company achieved a record PKR 19.02 billion ($66.74 million) in sales, a 37% increase over the previous year, with an improved operating profit margin of 16%, up from 11% in 2023. This surge in sales and profitability is attributed to the uninterrupted gas supplies which were not available during the same period last year, significantly affecting production.

Amid these developments, Agritech remains at the center of an acquisition bid by major fertilizer and cement firms. Maple Leaf Cement Factory and Maple Leaf Capital collectively hold 24.28% of Agritech shares, while FFC owns over 30%. The outcome of this corporate endeavor is expected to be finalized by January 2025, pending shareholder and regulatory approvals.