Fauji Fertilizer Company (FFC) announced CY22 result today, where it posted unconsolidated earnings of PkR20.0bn for the year, culminating into an EPS of PkR15.8. The company posted a NPAT of PkR5.2bn (EPS: PkR4.0) for the final quarter of the year, lower than industry expectations.

On the consolidated basis, earnings for the year amounted to PkR33.7bn (EPS: PkR27.0) in CY22.

·         Net sales for the company have clocked in at PkR30.2bn for the final quarter of the year, down by 14%YoY on the back of considerably lower DAP offtakes, while increasing by 23%QoQ as the offtakes recovered from the devastation caused by the floods which hit the country in 3QCY22.

·         FFC has posted margins of 37% in CY22, remaining relatively flat compared to the 36% recorded in CY21. On the other hand, margins in 4QCY22 fell to 32% vs. 33% posted in the SPLY, while declining considerably from the 39% recorded last quarter.

·         Financial costs for the company have risen by 36%QoQ to clock in at PkR1.6bn for the quarter, while more than doubling for CY22 as the PkR4.9bn recorded in the year is an increase of 112%YoY. Amid the high interest rate environment, the company will continue to face heightened charges unless ST debt is retired.

·         The company recorded bumper Other Income of PkR4.2bn in the quarter, as ST investments paid off along with possible dividend income from its investments in associates and subsidiaries.

·         The company has announced a dividend payout of PkR3.15/sh, taking cumulative payout in CY22 to PkR12.13/sh, ending up with a D/Y of ~12%.

Courtesy – AKD Research