FFBL reports its earnings dent by super tax impacts in 2QCY22.

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

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