FFC delivers strong profit, yet sends PSX sliding

January 29, 2026 (MLN): Fauji Fertilizer Company Limited (PSX:FFC) reported a net profit of Rs73.6bn for the year ended December 31, 2025, which marks a 13.6% increase from Rs64.7bn recorded in the previous year.

The company’s earnings per share rose to Rs51.69 from Rs45.49, while the board announced a cash dividend of Rs8.5 per share.

Despite the strong earnings growth, the stock faced heavy selling pressure as the announced dividend fell short of market expectations. Brokerages had largely anticipated a higher payout in view of the company’s robust profitability and cash generation, leading to market disappointment.

Net turnover increased 15.8% YoY to Rs432.4bn from Rs373.5bn, which reflected solid revenue growth achieved in a challenging operating environment.

The fertilizer market remained oversupplied for most of the year due to adverse climate conditions, uneven crop yields, and stressed farm economics, which resulted in elevated inventory levels across the industry.

However, FFC’s effective inventory management and sales strategy enabled it to remain the lowest inventory-carrying company in the sector throughout the year.

Cost of sales rose 22.5% to Rs301.8bn from Rs246.4bn, which resulted in a gross profit of Rs130.6bn, up 2.7% from Rs127.2bn in the previous year. Gross margins faced some pressure as cost growth outpaced revenue expansion, reflecting broader industry dynamics.

Distribution costs increased 10.1% to Rs32.3bn from Rs29.4bn, while gross profit after distribution costs stood at Rs98.3bn, marginally higher than Rs97.8bn in FY2024.

Finance costs remained largely stable at Rs6.5bn.

Other expenses rose 7.5% to Rs10.7bn, while other income increased 13.1% to Rs39.8bn, providing additional support to profitability.

Profit before income tax and final tax reached Rs120.9bn, an improvement over the previous year. Final taxes in the form of levies declined sharply, further aiding earnings.

The company recorded a taxation charge of Rs47.3bn, up 6.6% YoY.

The absence of impairment and subsidy-related losses that had weighed on the prior year’s results also contributed to the improvement in net profitability.

Given Fauji Fertilizer Company’s significant weight of around 9.4% in the KSE-100 Index, the sharp decline in its share price had a pronounced impact on the broader market.

Of the total 5,046-point decline at the time of writing, recorded by the benchmark index during the session, FFC alone accounted for approximately 1,900 points, representing nearly 36% of the day’s overall index loss. The KSE-100 Index was down 2.87% at 182,974.

At the time of writing, FFC was trading at Rs597.1, down 9.93%.

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