Fauji Fertilizer Company (FFC) announced its 4Q2021 financial results, where the company has posted unconsolidated profit of Rs6,008mn (EPS: Rs4.72) against profit of Rs7,055mn (EPS: Rs5.55) in same period last year. The result came in line with our expectation.

This takes 2021 earnings to Rs21,896mn (EPS: Rs17.21), up 5% YoY.

Alongside result, the company announced interim cash dividend of Rs4.65/share, taking cumulative cash dividend to Rs14.5/share in 2021.

Revenues of the company increased by 20% YoY during 4Q2021, owing to increase in DAP prices by 96% YoY. Whereas, urea and DAP offtakes decreased by 3% and 10% YoY, respectively.

Gross Margins increased by 4ppts YoY to 33% in 4Q2021 led by increase in DAP trading margins. However, sequentially gross margins eroded by 4.9ppt.

Other Income rose by 36% YoY to Rs2,005mn in 4Q2021 due to higher short term investments and interest rates.

Finance cost significantly increased by 80% to Rs840mn amidst higher borrowing and interest rates.

Effective tax rate has clocked in at 29% in 4Q2021 as compared to 32% in 4Q2020.

Courtesy – AL Habib Capital Markets Pvt Ltd