October 25, 2021 (MLN): Fauji Fertilizer Bin Qasim Limited (FFBL), the country’s sole DAP producer, has unveiled its nine-month financial results wherein the company posted a consolidated net profit of Rs5.96 billion (EPS: Rs4.41) compared to a net profit of Rs24.41mn in the same period a year ago.
This splendid performance is mainly due to increased DAP sale price, higher other income due to increase in the share of profit from associated companies coupled with lower finance cost amid lower mark-up rates.
The company has achieved a consolidated net turnover of Rs81.64bn which is 34% higher as compared to the same period last year’s turnover of Rs61bn due to the hike in DAP prices.
Apart from that, since the rabi season has arrived, the demand for DAP has also been increased, as per the research note by Darson Securities. Resultantly, the gross margins of the company during the said period scaled up from 17% to 24%.
On the cost front, distribution and selling expenses stood at Rs4.8bn, up by 10.5% YoY while administrative expenses inched up by 2.7% to clock in at nearly R1.44bn during 9MCY21.
The positive impact of lower mark-up rates, efficient capital management, and lower utilization of running finance facilities was visibly seen in financial cost which plunged by 45.6% YoY to Rs3.69bn in the said period.
Furthermore, the company saw a 28% increase in the income received from a share of profit of associates and joint ventures during 9MCY21, most likely due to gain recorded on account of the sale of Foundation Wind Energy I & II.
Meanwhile, the company has expensed out Rs971mn on account of the unwinding of GIDC liability during the review period.
On the taxation front, the company paid Rs2.88bn, showing a two-fold increase against the taxes paid in SPLY.
Alongside the financial results, the Board of Directors of FFBL also approved and authorized the Company to subscribe to 527,015,064 shares (the "FFBL Right Shares") of Fauji Foods Limited ("FFL") for the total price of Rs5,270,150,640 (calculated at the rate of Rs10 (Pakistani Rupees Ten) per share), as part of the Company's entitlement to FFL's rights issue
The company has also been authorized to subscribe to the Fauji Foundation's ("FF") renounced portion of FFL's rights issue. i.e., 65.484.936 shares (the "FF Right Shares") for a total price of Rs654.849.360.
In each case, by utilizing the total subordinated debt of Rs5.925 billion (the "Principal Amount of Debt"), granted by the Company to FFL. which utilization of the Principal Amount of Debt for acquiring shares has also been previously approved by the shareholders of the Company.
Consolidated Profit and Loss for the Nine months ended September 2021 ('000 Rupees) |
|---|
| Sep-21 | Sep-20 | % Change |
Sales-net | 81,637,097 | 60,915,183 | 34.0% |
Cost of Sales | (61,714,177) | (50,330,916) | 22.6% |
Gross Profit | 19,922,920 | 10,584,267 | 88.2% |
Selling and distribution cost | (4,803,228) | (4,344,961) | 10.5% |
Administrative expenses | (1,439,419) | (1,401,747) | 2.7% |
| 13,680,273 | 4,837,559 | 182.8% |
Finance costs | (3,690,902) | (6,782,870) | -45.6% |
Unwinding of GIDC payable | (971,674) | - | |
Other operating expenses | (5,065,436) | (406,946) | 1144.7% |
Other income | | | |
Share of profit of associates and joint venture- net | 3,695,720 | 2,887,798 | 28.0% |
Others | 1,189,144 | 794,094 | 49.7% |
Profit before taxation | 8,837,125 | 1,329,635 | 564.6% |
Taxation-net | (2,876,717) | (1,305,222) | 120.4% |
Profit after taxation | 5,960,408 | 24,413 | 24314.9% |
Earnings per share - basic and diluted (Rupees) | 4.41 | 0.33 | 1236.4% |
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