Fauji Fertilizer Bin Qasim Limited (FFBL) announced the financial result for 2QCY22 yesterday, where the company posted earnings of PKR 1,783mn (EPS: PKR 1.38) compared to PKR 2,609mn (EPS: PKR 2.03) in 2QCY21, down by 32% YoY on account of imposition of super tax during the quarter. On a cumulative basis, the net profit declined by 12% YoY, settling at PKR 3,410mn (EPS: PKR 2.64).

Result Highlights

· Topline surged by 173% YoY to PKR 46,149mn during 2QCY22, amid a surge in urea and DAP prices by 22% and 79% YoY, respectively, along with a 59% YoY jump in DAP offtake. However, urea offtake dropped by 10% YoY in 2QCY22. Meanwhile, in 1HCY22, net sales arrived at PKR 70,933mn, up by 137% YoY, given the growth in urea and DAP offtake by 14% and 28% YoY, respectively, along with an 18% and 87% YoY increase in urea and DAP prices, respectively.

· Gross margins clocked in at 19.05% in 2QCY22 (down by 162bps YoY), which is owed to higher phosphoric acid prices.

· The other expense arrived at PKR 2,922mn in 2QCY22, up by 10x YoY due to exchange loss.

· Other income ascended by 31% YoY to PKR 3,251mn in 2QCY22 at the back of dividend from Pakistan Maroc Phosphore (PMP).

· Financial charges climbed up by 49% YoY, clocking in at PKR 907mn during 2QCY22, which is attributable to higher interest rates and short-term borrowings.

· The company booked effective taxation at 72% in 2QCY22 vis-à-vis 12% in 2QCY21. The taxation during this quarter includes super tax related to profit before tax of CY21 and 1HCY22.

Courtesy – AHL Research