Fatima Fertilizers' revenue drops by 27% owing to closure of Sheikhpura plant
MG News | August 26, 2020 at 05:21 PM GMT+05:00
August 26, 2020 (MLN): Fatima Fertilizers Limited has announced the financial results for the half-year ended June 30, 2020, which show a Profit after-tax figure of Rs. 7.16 billion (EPS: 3.41) i.e. 1.5% higher than the earnings recorded in the same period of last year.
The company failed to lift its bottom-line income by a significant margin due to a fall in its revenue by 27%, which in turn was caused by the closure of the Sheikhpura plant due to non-availability of gas. As per Taurus Securities, the lockdowns and limited operations also exerted pressure on the revenue numbers.
The finance cost of the company showed a surge of 38.1% due to an increase in the running finance requirement.
Other notable highlights include a 1.22x increase in the non-core income, as well as a 5.2% increase in the share of profit from associates, both of which managed to provide some respite to the strained financial position of the company.
Besides the financial results, the company also informed that the acquisition of production and operating Plants (Ammonia, Urea, Nitric Acid, Nitro-Phosphate, Calcium Ammonium Nitrate, and Clean Development Mechanism) from associated company namely Pakarab Fertilizers Limited would be complete effective September 1, 2020.
Furthermore, the Board of Directors considered and accorded ‘in-principle’ approval to the proposal to demerge Fatima Fertilizer Company Limited and transfer its Sheikhupura plant-related operations to Fatimafert Limited, an unlisted public limited company to be incorporated by the Company as a wholly-owned subsidiary, to be implemented, effective October 1, 2020, by way of a Scheme of Arrangement.
| Consolidated Financial Results for the half-year ended June 30, 2020 (Rupees'000) | |||
|---|---|---|---|
| Jun-20 | Jun-19 | % Change | |
| Sales | 24,832,728 | 34,013,172 | -27.0% |
| Cost of sales | (9,647,514) | (18,575,995) | -48.1% |
| Gross Profit | 15,185,214 | 15,437,177 | -1.6% |
| Distribution cost | (1,570,780) | (1,878,837) | -16.4% |
| Administrative expenses | (1,554,061) | (1,309,529) | 18.7% |
| Other operating expenses | (859,702) | (1,052,947) | -18.4% |
| Other income | 1,028,455 | 463,350 | 122.0% |
| Finance cost | (2,185,419) | (1,582,139) | 38.1% |
| Share of profit from associate | 13,030 | 12,383 | 5.2% |
| Profit before taxation | 10,056,737 | 10,089,458 | -0.3% |
| Taxation | (2,895,784) | (3,032,277) | -4.5% |
| Profit for the period | 7,160,953 | 7,057,181 | 1.5% |
| Earnings per share | 3.41 | 3.36 | 1.5% |
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