FFC maintains profit, offers Rs12 per share dividend

July 29, 2025(MLN): Fauji Fertilizer Company Limited (PSX: FFC) reported a slight year-on-year (YoY) increase of 0.71% in profit after tax, reaching Rs37.95 billion for the six-month period ended June 30, 2025, compared to Rs37.69bn recorded in the same period last year (SPLY).

The company declared an interim cash dividend of Rs12 per share (120%), in addition to the earlier interim dividend of Rs7 per share (70%) already paid.

The earnings per share (EPS) stood at Rs26.67, down from Rs29.2, reflecting an 8.66% decline.

The company's net turnover surged by 43.72% YoY to Rs182.29bn in 1H2025, up from Rs126.84bn in SPLY.

The growth in revenue, however, was accompanied by a 65.98% jump in cost of sales, which climbed to Rs119.49bn, squeezing gross margins.

Consequently, gross profit increased by a modest 14.5% to Rs62.8bn, compared to Rs54.85bn in the same period last year.

Administrative and distribution expenses rose significantly by 55% YoY to Rs17.75bn, which limited the operating profit growth to just 3.81%, standing at Rs45.05bn versus Rs43.39bn in SPLY.

Finance costs also escalated by 22.94% YoY, reaching Rs3.82bn, largely due to a higher interest rate environment.

Meanwhile, other expenses recorded a 9.38% increase to Rs4.63bn, whereas other income dipped slightly by 1.26% to Rs9.97bn from Rs10.10bn.

The share of profit from associates and joint ventures declined by 11.98% to Rs13.23bn, as compared to Rs15.02bn in the corresponding period of last year.

Despite these challenges, the company reported profit before income and final tax of Rs59.79bn, almost flat with a minor dip of 0.38% YoY.

The provision for taxation increased to Rs21.82bn, up 8.06% from Rs20.19bn in SPLY, resulting in a post-tax profit of Rs37.95bn.

Of the total profit, Rs37.08bn was attributable to equity holders, showing a slight dip of 0.18%, while non-controlling interest earnings grew substantially by 62.16% to Rs868.78mn.

Building on its operational performance, the company completed planned turnarounds at its Machhi and Port Qasim plant sites.

This led to Urea production of 1,419 thousand tonnes and DAP production of 393 thousand tonnes, with no DAP imports during the period due to ample market availability.

Despite challenging conditions such as poor farm economics, drought, and weak crop procurement—FFC accounted for 43% of industry Urea output and 57% of DAP production/imports.

The company’s strong market outreach led to Urea offtake of 1,122 thousand tonnes and DAP offtake of 288 thousand tonnes, capturing market shares of 43% and 64%, respectively, while maintaining relatively low inventory levels.

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