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FFBL outstrips peers in profitability growth

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April 22, 2022 (MLN): Fauji Fertilizer Bin Qasim Limited (FFBL), the country’s sole DAP producer, has revealed its financial statement for 1QCY22 today as per which the company’s net income surged by a massive 2.6x YoY to Rs3.2 billion (EPS: Rs2.47) compared to Rs1.2bn (EPS: Rs0.87) reported in 1QCY21, the company’s filing on PSX showed today.

The company has outperformed peers in profitability growth as ENGRO, EFERT, and FATIMA reported 0.8%, 4%, and 51% YoY growth respectively in their net profits. 

This splendid performance of FFBL is mainly due to an increase in Urea offtake amid better retention prices, higher DAP primary margins, and a 129% increase in other income due to a strong cash position and higher share of profit from associates.

To highlight, FFBL DAP offtake declined by 2% YoY in 1QCY22. While DAP primary margins increased by 37% YoY in 1QCY22 due to higher international DAP prices amid constrained global supply.

FFBL Urea offtake increased by 67% YoY to 117K tons in 1QCY22. Moreover, Urea prices were also up by 14% YoY in 1QCY22 due to the pricing power of base players amid strong agronomics and constrained supply.

The net sales of the company increased by 66% YoY, owing to better retention prices of DAP. To note, DAP prices have increased by around 100% YoY which is in line with the increase in international DAP prices. Accordingly, the gross margins of the company remained stable at 24%.

Due to exchange loss, FFBL has recorded other expenses of Rs826.4mn in 1QCY22 against expenses of Rs191mn in the corresponding period last year.

With regards to major expense heads, the company’s selling and distribution expenses increased by 73.4% YoY to Rs2bn 1Q2022 due to an increase in freight cost, while admin costs rose by 28% YoY. In addition, financial charges have jumped by 8% YoY due to the higher borrowing rate.

As per IFRS-9, the company has reported a GIDC provision of Rs258mn according to the directives of the Supreme Court. On the taxation front, the effective tax rate has clocked in at 36% in 1Q2022 as compared to 35% in 1Q2021.

Consolidated Profit and Loss for the First Quarter ended March 31, 2021 ('000 Rupees)

 

Mar-22

March-22

% Change

Sales-net

                     28,913,264

           17,455,908

65.6%

Cost of Sales

                  (21,988,937)

         (13,300,895)

65.3%

Gross Profit

                       6,924,327

             4,155,013

66.6%

Selling and distribution cost

                     (2,065,471)

           (1,191,266)

73.4%

Administrative expenses

                        (576,145)

               (449,571)

28.2%

 

                       4,282,711

             2,514,176

70.3%

Finance costs

                     (1,401,810)

           (1,297,046)

8.1%

Unwinding of GIDC

                        (257,942)

               (345,886)

-25.4%

Other operating expenses

                        (826,443)

               (191,105)

332.5%

Other Income

 

 

 

Share of profit of associates and joint venture- net

                       1,877,207

                 755,322

148.5%

Others

                           878,883

                 448,126

96.1%

Profit/ (Loss) before taxation

                       4,552,606

             1,883,587

141.7%

Taxation

                     (1,351,208)

               (661,288)

104.3%

Profit/ (Loss) after taxation

                       3,201,398

             1,222,299

161.9%

Earnings/ (loss) per share – basic and diluted (Rupees)

                                  2.47

                        0.87

183.9%

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Posted on: 2022-04-22T14:45:28+05:00

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