Fauji Fertilizer Company earnings arrived at PKR 8.27/share in 1QCY24

Fauji Fertilizer Company Limited (FFC) announced its financial results today. The company posted earnings of PKR 10,522mn (EPS: PKR 8.27) during 1QCY24 versus PKR 7,730mn (EPS: PKR 6.08) in 1QCY23, up by 36% YoY. On a sequential basis, the company’s net profit grew 41% QoQ. In addition to the result, FFC announced an interim cash dividend of PKR 5.50/share in 1QCY24 (PKR 4.26/share in 1QCY22).

Result Highlights       

Net Sales surged by 60% YoY during 1QCY24, arriving at PKR 58,407mn on the back of i) a 5% YoY increase in urea offtake and ii) a jump in urea and DAP prices in 1QCY24 by 66% and 22% YoY, respectively. Alongside this, the company distributed 94k tons of urea imported by the government during the quarter. Meanwhile, the DAP sales decreased by 7% YoY. On a QoQ basis, the topline climbed up by 35% which is attributable to an increase in urea and DAP prices tagged with 11% YoY growth in urea offtake.

Gross margin was 30% (down by 1,043bps YoY) in 1QCY24 due to i) higher gas prices and ii) the high cost of imported urea. Similarly, on a sequential basis, the gross margins were reduced by 1,506bps QoQ due to the aforementioned reasons.

The distribution cost witnessed a massive 70% YoY jump, settling at PKR 5,193mn in 1QCY24 due to the implementation of the Axle Weight Regulation.

Financial charges increased by 3% Year over Year, clocking in at PKR 1,505mn in 1QCY24, due to higher interest rates.

Other income swelled by 3x YoY, settling at PKR 10,276mn in 1QCY23, given the increase in income from short-term investments and dividend income from subsidiaries and an associate company (AKBL).

The company booked effective taxation at 42% in 1QCY24 vis-à-vis 35% in 1QCY23.

Courtesy – AHL Research 

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