January 25, 2024 (MLN): Fauji Fertilizer Bin Qasim Limited (PSX: FFBL) has wrapped up 2023 in green as its profitability clocks in at Rs4.15 billion [EPS: Rs2.35]. However, the bottom line has shrunk by 48% YoY as compared to Rs8bn profits in 2022.
This drop is primarily attributed to the loss in Pakistan Maroc Phosphore S. A (PMP), which is affected by international commodity price trends i.e. high decrease in phosphoric acid price as compared to its raw material prices, according to the company’s statement.
Along with results, the company also announced a final cash dividend for the year ended December 31 , 2023 at Rs. 1 per share i.e. 10%.
Going by the results, the company’s top line grew by 21% YoY to Rs221.61bn as compared to Rs183bn in SPLY.
The cost of sales increased by 20% YoY, which improved the gross profit by 25.4% YoY to Rs44.28bn in 2023.
During the period under review, other income jumped by 2.3x YoY to stand at Rs7.63bn in CY23 as compared to Rs3.26bn in SPLY.
On the expense side, the company observed an increase in Distribution & selling costs by 30.4% YoY, while administrative expenses dropped by 8.8% YoY to clock in at Rs1.92bn during the review period.
The company’s finance costs skyrocketed by 51% YoY and stood at Rs12.63bn as compared to Rs8.36bn in CY23, mainly due to higher interest rates and carryover of higher DAP inventory.
On the tax front, the company paid a lower tax worth Rs12.98bn against the Rs7.95bn paid in the corresponding period of last year, depicting a surge of 63% YoY.
The availability of gas at the government allocated level remained the main challenge for the Company during the year.
This not only impacted the Company’s production but also added to the challenges of farming community in the form of product shortage and price manipulation by middlemen throughout the year.
As a result, the government was also forced to import 220 KT Urea from the international market.
The company’s Urea plant operated at only 52% of its 650 KT capacity, primarily due to gas curtailment. The company received 13,714 MMSCF gas supply during the year representing 42% short gas supply as compared to the government allocated level of 23,800 MMSCF and 28% short supplies in comparison to previous year level of 19, 119 MMSCF.
Consequently, Urea production declined by 36% to 336 KT (2022: 524 KT).
Looking ahead, securing gas supply at the allocated levels will continue to be a challenge for consistent fertilizer production.
The management urges the government to ensure consistent gas supplies to the fertilizer sector, benefitting the farming community through the availability of fertilizer at affordable prices and eliminating the need for fertilizer imports, ultimately contributing to the growth of agriculture sector and the economy of the country.
The domestic and international OAP market forecast remains stable, contingent upon the geopolitical landscape.
| Consolidated Profit and Loss for the year ended December 31, 2023 (‘000 Rupees) | |||
|---|---|---|---|
| Dec-23 | Dec-22 | % Change | |
| Sales-net | 221,613,687 | 183,071,016 | 21.1% |
| Cost of Sales | (177,325,390) | (147,751,569) | 20.0% |
| Gross Profit | 44,288,297 | 35,319,447 | 25.4% |
| Selling and distribution cost | (11,401,302) | (8,741,503) | 30.4% |
| Administrative expenses | (1,927,178) | (2,114,038) | -8.8% |
| 30,959,817 | 24,463,906 | 26.6% | |
| Finance costs | (12,636,210) | (8,367,484) | 51.0% |
| Other operating expenses | (8,896,482) | (8,604,547) | 3.4% |
| Allowance for expected credit losses | (101,670) | (57,909) | 75.6% |
| Other Income | 7,636,720 | 3,266,657 | 133.8% |
| Share of profit of associates and joint venture- net | 2,290,815 | 6,980,449 | -67.2% |
| Unwinding cost in GIDC Payable-net | (498,183) | (891,198) | -44.1% |
| Loss before taxation | 18,754,807 | 16,789,874 | 11.7% |
| Taxation-net | (12,986,622) | (7,958,491) | 63.2% |
| Profit after taxation | 5,768,185 | 8,831,383 | -34.7% |
| Loss from discontinued operations – net of tax | (1,611,637) | (803,871) | 100.5% |
| Profit for the year | 4,156,548 | 8,027,512 | -48.2% |
| Loss per share – basic and diluted (Rupees) | 2.35 | 5.92 | -60.3% |
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Posted on: 2024-01-25T15:24:07+05:00
