FFBL: Loss spree continues

MG News | April 24, 2020 at 06:43 PM GMT+05:00

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April 24, 2020 (MLN): Fauji Fertilizer Bin Qasim (FFBL) has announced financial results today for the Quarter ended on March 31, 2020, wherein the company reported a net loss of Rs 2.9 billion against the loss of Rs 2.4 billion in the same quarter last year, indicating that the losses have increased by 20% YoY.

The loss per share (LPS) of the company clocked in at Rs 2.8 per share versus LPS of Rs 2.39 per share during the quarter ended on March 2019.

Despite witnessing a noteworthy improvement in the top-line by 87.3% YoY due to higher volumetric Urea and DAP sales (up by 184% YoY and 214% YoY respectively) and on account of pricing disparity between EFERT and FFBL, the company failed to bring a turnaround in its bottom-line.

In addition to this, the gross margins of the company reduced from 12% to 8% despite improved DAP prices and GIDC exemption.

According to Topline Research, the company booked a loss of Rs3 billion (LPS: Rs3.26) vs. a loss of Rs1.867 billion (LPS: 2.00) in its fertilizer business, which was higher than industry expectation due to higher than expected Gross Loss.

The food business of the company (Fauji Foods limited) also posted a Gross Loss of Rs100 million in 1Q2020 vs. a Gross Profit of Rs 31million in 1Q2019, due to increase in the cost of production amidst PKR devaluation.

The further injury occurred due to high debt level which increased financial charges of the company by 46.8% YoY, the other expenses also increased 3.2x attributable to an impairment loss against investment which further amplified company’s net losses.

Consolidated Profit and Loss for the First Quarter ended March 31, 2020 ('000 Rupees)
	Mar-20	Mar-19	% Change
Sales-net	12,879,987	6,877,403	87.3%
Cost of Sales	(11,821,750)	(6,054,096)	95.3%
Gross Profit	1,058,237	823,307	28.5%
Selling and distribution cost	(988,907)	(1,074,278)	-7.9%
Administrative expenses	(459,179)	(487,846)	-5.9%
	(389,849)	(738,817)	-47.2%
Finance costs	(2,824,558)	(1,924,569)	46.8%
Other operating expenses	(272,637)	(83,602)	226.1%
Other Income	807,552	114,660	604.3%
Share of profit of associates and joint venture- net	235,414	294,848	-20.2%
Loss before taxation	(2,444,078)	(2,337,480)	4.6%
Taxation	(456,271)	(78,666)	480.0%
Loss after taxation	(2,900,349)	(2,416,146)	20.0%
Loss per share - basic and diluted (Rupees)	(2.81)	(2.39)	17.6%

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