April 23, 2022 (MLN): Fatima Fertilizer Company Limited (FATIMA) has witnessed a significant 50.8% YoY increase in net profits for the 1QCY22 to Rs5.69 billion (EPS: Rs2.71), compared to the profits of Rs3.77bn (EPS: Rs1.80) in the preceding year.
The increase in the company’s bottom line was attributed to higher sales, lower finance costs, and higher other income.
Going by the results, the topline of the company clocked in at Rs29.11bn, registering 35% YoY growth compared to the same period last year, mainly backed by higher urea volumes, coupled with elevated DAP and NP prices despite lower CAN/DAP/NP offtake, a research note by Intermarket Securities said.
However, an increase in the cost of sales during 1QCY22 led the gross margin to decrease by a mere 1ppt to 42% from 43% in 1QCY21
On the costs front, the company observed an 8% YoY decrease in distribution costs. While administrative expenses jumped by 32% YoY and a whopping 2.5x YoY jump in other operating expenses.
Notably, the other income surged by 3.5 times YoY to Rs340mn which may be due to higher short-term investments and dividend income, the report added.
Owing to a significant increase in volumes, various cost optimization initiatives, better working capital management and reduced borrowing costs, the bottom line expanded by 50.8% YoY during 1QCY22.
On the taxation front, the effective tax rate of the company improved to 31% against 36% in 1QCY21.
|
Consolidated financial results for the first quarter ended on March 31, 2022 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Mar-22 |
Mar-21 |
% Change |
|
Sales |
29,114,016 |
21,603,567 |
34.76% |
|
Cost of sales |
(16,863,457) |
(12,339,013) |
36.67% |
|
Gross profit |
12,250,559 |
9,264,554 |
32.23% |
|
Distribution cost |
(1,429,288) |
(1,554,714) |
-8.07% |
|
Administrative expenses |
(1,131,439) |
(856,744) |
32.06% |
|
Finance cost |
(416,781) |
(542,548) |
-23.18% |
|
Other operating expenses |
(1,263,391) |
(498,624) |
153.38% |
|
Other income |
340,305 |
98,494 |
245.51% |
|
Share of profit from associates |
7,781 |
6,735 |
15.53% |
|
Other gain/(loss) |
|
|
|
|
-unwinding of provision for GIDC |
(77,591) |
– |
– |
|
-loss allowance on subsidy receivable from GoP |
(27,431) |
– |
– |
|
Profit before tax |
8,252,724 |
5,917,153 |
39.47% |
|
Taxation |
(2,562,716) |
(2,144,263) |
19.52% |
|
Profit for the period |
5,690,008 |
3,772,890 |
50.81% |
|
Earnings per share – basic and diluted (Rupees) |
2.71 |
1.80 |
50.56% |
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