Fauji Fertilizer Company (FFC) has announced its 2QCY22 result, where it posted unconsolidated PAT of PkR3.3bn (EPS: PkR2.64), down 7%YoY. This takes cumulative 1HCY22 PAT to PkR9.6bn (EPS: PkR7.55) vs PAT of PkR9.4bn (EPS: PkR7.42) in same period last year. The result is above our expectation attributable to higher other income, possibly due to higher than expected dividend from PMP.
· Company posted topline of PkR28.3bn vs PkR22.4bn in SPLY, depicting an increase of ~27%. The increase in topline is primarily driven by higher urea prices, which is up by 12%/6% YoY/QoQ. Urea volumes also improved by 15%/2% on YoY/QoQ basis.
· Gross margins clocked in at ~40.7% during 2QCY22, up by ~500bps on QoQ basis, attributable to higher urea price.
· Finance cost witnessed a jump of 146% on YoY basis, amid higher debt level and rising financing cost.
· Other income clocked in at PkR3.2bn, up by 164%/14% YoY/QoQ. The increase is mainly attributable to higher short term investment and higher dividend from PMP.
· Effective tax rate for the quarter clocked in at ~68%, attributable to imposition of super tax and poverty alleviation tax announced in federal budget.
· Company has announced cash dividend of PkR2.10/sh.
Courtesy – AKD Research