The management of Fatima Fertilizers Limited held a Corporate Briefing Session on 10th Jun’21 to discuss financials of CY20, 1QCY21 and future outlook.
Key Takeaways
· To recall the company during CY20 posted a Profit after Tax of PKR 13,275mn (EPS: PKR 6.32) against 12,070mn (EPS: PKR 5.75) in CY19, depicting a jump of 10% YoY. While in 1QCY21, the company’s bottom-line showcased a stellar growth of 53% YoY arriving at PKR 3,773mn (EPS: PKR 1.80).
· During CY20, the company completed its assets purchase transaction of Pakarab Fertilizers Limited. With this addition, Fatima Fertilizers has become the largest fertilizer manufacturing company in the country with a name plate production capacity of 2,572k MT (Urea: 1,038k MT, CAN: 870k MT and NP: 665k MT) compared to FFC (2,048k MT), FFBL (1,201k MT) and EFERT (2,375k MT).
· In CY20, the company successfully reduced long term loan to PKR 9bn. Moreover, during 1QCY21, long term debt further reduced by PKR 2bn to PKR 7bn.
· The company expects the offtake of Fertilizers during CY21 to be healthy owed to better farmer economics. With higher production capacity of 2.57mn MT at company’s disposal, the company is all set to contribute higher sales volumes to the fertilizer sector.
· The company is committed to focus on valued added products CAN and NP so that it can reap the benefit of being the only manufacturer of these products in the country.
· The company informed that gas allocation for Fatima Fertilizer Limited’s Sadiqabad, Sheikhapura and Multan plants are 110 mmcfd, 48 mmcfd and 58 mmcfd, respectively.
· The company reiterated that concessionary gas agreement, which was a 10-year price regime, is expiring on 30th Jun’21 and the company will follow the industrial rate for fertilizer feed gas going forward.
· The company disclosed that it has diversification plans in the pipeline which pertains to real estate, large scale manufacturing, service and mining sector. Details regarding diversification will be shared after conclusion of ongoing feasibility study.
· On the question regarding sales tax disallowance reversal, the company said that provision maybe reversed but as of now it is too early and it will take some time.
Courtesy – AHL Research