Fauji Fertilizer Bin Qasim Limited (FFBL) announced financial result for 1HCY23 today where the company posted a loss after tax of PKR 4,950mn (LPS: PKR 3.83) compared to a net profit of PKR 3,410mn (EPS: PKR 2.64) in 1HCY22. On a quarterly basis, the company reported earnings of PKR 479mn (EPS: PKR 0.37), down by 73% YoY.

Result Highlights

Net sales dropped by 6% YoY to PKR 66,758mn during 1HCY23 amid a fall in urea and DAP offtake by 23% and 11% YoY, respectively. Meanwhile, urea and DAP prices reported a 44% and 6% jump, respectively, in 1HCY23. In 2QCY23, the topline settled at PKR 35,235mn, down by 24% YoY owed to a plunge in urea and DAP offtake by 21% and 24% YoY, respectively.

Gross margins clocked in at 12.90% in 2QCY23 (down by 615bps YoY), which is due to lower DAP sales coupled with usage of expensive fuel for the urea plant due to an outage at FPCL (duration of which was one month).

Other income declined by 21% YoY to PKR 3,439mn in 1HCY23 at the back of lower income from cash and cash balances. Whereas, the other income in 2QCY23 declined by 22% YoY, arriving at PKR 2,541mn due to the aforementioned reason.

Financial charges climbed up by 3.3x YoY, clocking in at PKR 5,325mn during 1HCY23 which is attributable to higher interest rates and higher borrowings. Meanwhile, the financial charges during 2QCY23 ascended by 3.1x YoY due to the same reason.

The company booked effective taxation at 76% in 2QCY23 vis-à-vis 72% in 2QCY22. It is pertinent to note that the company booked super tax of 6% and 10% on PBT of CY22 and 1HCY23, respectively.

Other Information

During 1HCY23, the company received 6,489 mmcf gas, down by 33% YoY. In addition to this, the DAP plant was also shut down for 33 days during the 1HCY23. Hence, these factors resulted in lower urea and DAP production.

Courtesy – AHL Research