KARACHI - Fertilizer sector has posted profit after taxation (PAT) of Rs2.86 billion, showing an increase of 45 per cent, year on year basis in 1QCY08. Analysts attributed the growth of fertilizer sector to the record high urea sales. ENGRO recorded the greatest increase in YoY profitability of 153 per cent, with a PAT of Rs819million in 1QCY08. Net sales of the sector recorded a significant growth of 59 per cent YoY to Rs15,579m. Revenue drivers for the sector were, high urea sales of 1,260k tons (+72 per cent YoY), which more than covered up for the decline in DAP sales of 67 per cent YoY to 41k tons and increase in YoY WA urea and DAP prices of 12 per cent and 132 per cent, respectively. DAWH recorded the greatest rise in net sales of 166 per cent YoY to Rs1,887mn. Sector's gross profits, buoyed by high urea sales (own manufactured), matched the topline, rising by 55 per cent YoY to Rs5,693mn. Whereas, gross margins declined slightly by 77bps YoY to 36.5 per cent, which can be attributed to increase in sales of relatively low-margin imported urea (+353 per cent YoY to 56k tons) and DAP (+2913pc YoY to 32.9k tons), and increase in fuel gas prices by 5.5pc YoY to Rs251.55/mmbtu. ENGRO enjoyed the greatest increase in gross profits of 135pc YoY to Rs1,651mn while FFC achieved the highest gross margins of 40pc among the peers during 1QCY08. Cumulative urea production of he sector was observed at 1,119k tons (+1pc YoY), translating into a capacity utilization (effective capacity of 990k tons) of 113pc (-85bps YoY). Fauji Fertilizer (FFC) remained the most efficient plant with 127 per cent capacity utilization, while Fauji Fertilizer Bin Qasim FFBL recorded the highest increase in urea production (+21 per cent YoY). DAP production was down by 78 per cent YoY to 26.1k tons due to the closure of FFBL's DAP plant for BMRE for most part of 1QCY08. Well diversified portfolios of fertilizer companies helped increase sectors other income by 5 per cent YoY to Rs1,051mn with DAWH showing a marked increase of 2887 per cent YoY to Rs51mn.