FERTILIZERS GLOBAL PRICE TRENDS AND PERFORMANCE IN Presented by: Syed Aamir Ahsan CFO & GMF

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1 FERTILIZERS GLOBAL PRICE TRENDS AND PERFORMANCE IN 2008 Presented by: Syed Aamir Ahsan CFO & GMF 28 Jan 2009

2 SEQUENCE Global Price Trends Industry and FFBL Performance in 2008 Future Outlook

3 PRICE TREND DURING YEAR 2008 An unusual year for prices of commodities. Sharp rise in prices during first half ended with much sharper decline. Urea at $300 fob (60% decline from highs of above $ 800 in July-Aug 08). Price recovery of about $ 100 in last few days DAP at around $350 fob (70% decline from highs of $ 1250 in July-Aug 08) Continuation of bear run in Corn and Wheat FMB

4 PRICE TREND DURING YEAR 2008 Year 2008 Ammonia c+f Year 2008 Phos. Acid North Africa $ per tonne cfr India $/tonne January February March April May June July August September October November December January February March April May June July August September October November December FMB

5 LATEST MARKET PRICES OF PRODUCTS $ per tonne fob FMB

6 FERTILIZER INDUSTRY AND COMPANY PERFORMANCE YEAR

7 UREA

8 INDUSTRY UREA MOVEMENT 4TH QUARTER 4Q Q-2007 Variance Kt Kt % Opening (79) Produced (2) Imported Sold Closing (Adjusted)

9 INDUSTRY UREA MOVEMENT ANNUAL Variance Kt Kt % Opening (32) Produced Imported Sold Closing (Adjusted)

10 FFBL UREA MOVEMENT 4 TH QUARTER 4Q Q-2007 Variance% Kt Kt Opening 7 43 (84) Produced (2) Imported 0 2 (100) Sold (11) Closing 4 23 (83) Granular Urea Sale was 91% of target

11 UREA MARKET SHARES 4 TH QUARTER 2008 VS 2007 % Share 11

12 FFBL UREA MOVEMENT ANNUAL Variance% Kt Kt Opening (12) Produced Imported Sold Closing 4 23 (83) Granular Urea Sale was 112% of the target during the year.

13 UREA MARKET SHARES ANNUAL 2008 VS 2007 % Share 13

14 DAP

15 INDUSTRY DAP MOVEMENT 4TH QUARTER 4Q Q- Variance Kt 2007 % Kt Opening Produced Imported (100) Sold (25) Closing (Adjusted)

16 INDUSTRY DAP MOVEMENT ANNUAL Variance Kt Kt % Opening Produced Imported (71) Sold (46) Closing (Adjusted)

17 FFBL DAP MOVEMENT 4 TH QUARTER 4Q Q-2007 Variance% Kt Kt Opening Produced Sold Closing DAP Sale was 87% of the target during last quarter.

18 DAP MARKET SHARES 4 TH QUARTER 2008 VS 2007 are % Sha 18

19 FFBL DAP MOVEMENT ANNUAL Variance% Kt Kt Opening Produced Sold (13) Closing DAP Sale remained 56% of the target during the year.

20 DAP MARKET SHARES ANNUAL 2008 VS 2007 are % Sha 20

21 FINANCIAL HIGHLIGHTS Sales 26,821 12,243 Cost of sales (18,595) (7,420) Gross profit 8,226 4,823 Dist/other Chgs. (2,549) (1,544) Financial Chgs. (2,792) (631) Other income 1,520 1,252 Pretax profit 4,405 3,900 Tax (1,505) (1,360) Profit after tax 2,900 2,540 EPS Sales Urea Qty Variance +42% Urea Price Variance +20% DAP Qty Variance -13% DAP Price Variance +185% Costs and expenses Urea production up 37% DAP production up 32% Raw material cost up 427% Fuel & power up 56% Repairs & maint. down 20% Fin. chrgs. up Rs 2 billion Other income up Rs 268m including associates income of Rs 133 m

22 FACTORS CONTRIBUTED ADVERSLY Significantly lower than expected sales of DAP due to phenomenal increase in DAP prices. Delay in receipt of subsidy from GOP and increase in interest rates hurt the bottom line of Company with additional Rs 1 billion interest cost over last year. Pak Rupee devaluation translated into Rs 1.20 billion as foreign exchange loss to FFBL. Significant decline in commodity prices towards end of year forced us to write down inventories to the extent of Rs 1.4 billion. However, the above adverse factors were to some extent mitigated with: Volumetric growth in Urea Income from associates (PMP Rs 122 million and Fauji Cement Rs 10 million), recognized under International Accounting Standards

23 FUTURE OUTLOOK Reverse drive of fertilizer prices in last quarter of 2008 is likely to continue in the first quarter of 2009 We expect the DAP offtake to rise by about 30% next year at around 1 million tonnes. Deteriorated Urea/DAP application ratio and resultantly lower than expected yields, coupled with low prices of DAP would force the offtake to rise. Pakistan is having more than enough availability of both DAP and lately imported Urea during the first quarter At current price levels, there does not seem any need of DAP subsidy. Timely disbursement of promised wheat support price to the farmers must be ensured, in order to improve their cash cycle.

24 FUTURE OUTLOOK PMP - Performance remained satisfactory in first year of operations. PMP earned profit and accordingly FFBL booked its 25% share amounting Rs 122 million (results uptil September 2008). FFBL results in first quarter 2009 shall remain depressed due to: Shut down of operations due to annual turnaround Depressed sales of DAP Low urea production/sales due to annual turnaround High interest expense due to delay in GOP subsidy. However, despite challenges mentioned earlier, we expect to have highest production and sales during 2009 and accordingly, good results by the end of Year 2009

25 THANK YOU

26 Question - Answer Session