FFBL stages earnings turnaround due to higher DAP margins

By MG News | April 26, 2021 at 02:37 PM GMT+05:00

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April 26, 2020 (MLN): Strong DAP offtake and prices helped Fauji Fertilizer Bin Qasim Limited (FFBL) in posting strong consolidated net profits of Rs 1.22 billion (EPS: Rs 0.87) in the first quarter ended March 31, 2021, against losses of Rs 2.90 billion (LPS: Rs 2.03) in the same period a year earlier.

The move to profits was helped by a 35.5% YoY rise in the net sales in 1QCY21 due to an uptrend in local DAP margins and dividend income support from its subsidies AKBL that announced a pay-out of Rs 3 per share in the last quarter, expanding gross margins to 24% from 8%, said Ailia Naeem, a Research Analyst at AKD Securities.

The company’s bottom line was further strengthened by lower finance costs as they came down by 54% YoY to Rs 1.30 billion amid a lower interest rate regime.

Meanwhile, the effective tax rate went up by 45% YoY to Rs 661 million during 1QCY21.

Consolidated Profit and Loss for the First Quarter ended March 31, 2020 ('000 Rupees)
	Mar-21	March-20	% Change
Sales-net	17,455,908	12,879,987	35.5%
Cost of Sales	(13,300,895)	(11,821,750)	12.5%
Gross Profit	4,155,013	1,058,237	292.6%
Selling and distribution cost	(1,191,266)	(988,907)	20.5%
Administrative expenses	(449,571)	(459,179)	-2.1%
	2,514,176	(389,849)	-
Finance costs	(1,297,046)	(2,824,558)	-54.1%
Unwinding of GIDC	(345,886)	-	-
Other operating expenses	(191,105)	(272,637)	-29.9%
Other Income	-		-
Share of profit of associates and joint venture- net	755,322	807,552	-6.5%
Others	448,126	235,414	90.4%
Profit/ (Loss) before taxation	1,883,587	(2,444,078)	-
Taxation	(661,288)	(456,271)	44.9%
Profit/ (Loss) after taxation	1,222,299	(2,900,349)	-
Earnings/ (loss) per share - basic and diluted (Rupees)	0.87	(2.03)	-

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