March 26, 2021 (MLN): After the challenging start of the year, Fatima Fertilizer Company Limited (FATIMA) has wrapped CY20 with a meager 10% YoY increase in net profits to Rs.13.27 billion (EPS: Rs.5.75/sh), compared to the profits of Rs.12 billion (EPS: 5.75/sh) reported in CY19.
The company also announced a final cash dividend of Rs.2.5 per share i.e. 25% for the year mentioned above.
Despite witnessing improvements in fertilizer offtake during 2HCY20, the company’s revenues dipped by 5% YoY mainly owing to challenges faced due to the Covid-19 pandemic and some price uncertainties in the 1HCY20. In addition, the closure of the Sheikhupura plant due to the non-availability of gas also affected the company’s topline.
The Cost of Sales during the year reduced by 10% YoY compared to CY19 mainly due to the release of subsidy by the Government to SNGPL against RLNG supply to Sheikhupura plant in 2019 amounting to PKR 5.7 billion, as a result, the gross margin of the company improved to 40% in CY20 as opposed to 37% in the previous year.
With regards to major expense heads, the FATIMA’s Distribution expenses grew by 2.39% YoY, while its admin-related expenses witnessed a rise of 21% YoY.
Due to series of rate cuts during the year and lower short-term borrowings, the financial charges of the company dipped by 7.7% YoY which provided a cushion to the company’s profitability.
Furthermore, in addition to the 66% YoY increase in income earned from other sources, the company booked Rs.877.5 million worth of gains on the re-measurement of GIDC which further strengthened the company’s profitability.
The effective tax rate of the company improved to 29% compared to 30% in CY19.
|
Financial Results for the year ended on December 31, 2020 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Dec-20 |
Dec-19 |
% Change |
|
Sales |
71,267,316 |
74,964,214 |
-4.93% |
|
Cost of sales |
(42,472,530) |
(47,065,331) |
-9.76% |
|
Gross profit |
28,794,786 |
27,898,883 |
3.21% |
|
Distribution cost |
(3,890,808) |
(3,800,064) |
2.39% |
|
Administrative expenses |
(3,368,500) |
(2,778,727) |
21.22% |
|
Finance cost |
(3,469,303) |
(3,760,909) |
-7.75% |
|
Other operating expenses |
(1,677,558) |
(1,480,466) |
13.31% |
|
Other income |
1,810,074 |
1,089,749 |
66.10% |
|
Gain on re-measurement of GIDC |
877,513 |
– |
|
|
loss allowance on subsidy receivable from GoP |
(360,244) |
– |
|
|
Share of profit from Associates |
26,795 |
24,687 |
8.54% |
|
Profit before tax |
18,742,755 |
17,193,153 |
9.01% |
|
Taxation |
(5,468,064) |
(5,123,471) |
6.73% |
|
Profit for the period |
13,274,691 |
12,069,682 |
9.98% |
|
Earnings per share – basic and diluted (Rupees) |
6.32 |
5.75 |
9.91% |
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