Engro Fertilizers Ltd (PSX: EFERT) is set to complete Phase 1 of its $300 million Production Enhancement Facility (PEF) project by end-August 2025, with procurement for Phase 2 already underway. The move is aimed at ensuring stable gas supply for fertilizer production.

During a recent corporate briefing, the company reaffirmed its intention to maintain a 100% dividend payout policy, subject to board approval, despite challenges such as weak farm economics, high working capital needs, and climate impacts.

EFERT reported earnings of PKR 8.5 billion (EPS: PKR 6.3) for 1HCY25, down 10% YoY, and declared an interim cash dividend of PKR 6.5 per share.

A sector-wide drop in urea sales (down 23% YoY) and rising input costs pressured profitability. However, EFERT’s urea market share improved to 34% in 2QCY25 from 24% in 1QCY25 due to strategic pricing.

DAP margins remained under stress as global prices surged while local rates remained subdued. The company also flagged rising urea inventories, which may prompt export discussions.

Meanwhile, EFERT is expanding agri-access through its Engro Markaz outlets and UgAi digital platform, along with a Rs250 million financing program in partnership with local banks to support small farmers.