April 25, 2024 (MLN): Fauji Fertilizer Bin Qasim Limited (PSX: FFBL) has reported its highest-ever first-quarter profit after tax of Rs4.3 billion [EPS: Rs3.33] as compared to the loss after tax of Rs5.4bn in the same quarter last year (SQLY).
According to the company, this robust turnaround is attributed to higher international DAP margins, significant forward sales, and a higher DAP sales volume of 179 KT (2023: 127 KT).
DAP production continued throughout the quarter (2024: 177KT vs 2023: 52KT), owing to the deferment of plant turnaround, which is now performed in alternate years.
FFBL further highlighted that DAP sales include 10KT of imported DAP.
Going by the results, the company's top line skyrocketed by 47.6% YoY to Rs46.52bn as compared to Rs31.52bn in SPLY.
The cost of sales also rose by 28.5% YoY but the change was less than proportionate to sales decline, which improved the gross profit by 4.01x YoY to Rs8.78bn in 1Q2024.
Accordingly, the gross margins improved to 18.86% as compared to 6.80% in SPLY.
On the expense side, the company observed a rise in Administrative Expenses and other expenses to clock in at Rs398.88m and Rs727.49m respectively during the review period.
One of the major factors contributing to the company's recovery from losses is the substantial reduction in exchange losses.
FFBL managed to decrease these losses from Rs4.62bn in 1QCY23 to just Rs6.45m in 1QCY24.
This achievement is attributed to the stability in the Pak Rupee-Dollar parity, which had previously adversely affected the results, according to the company.
Adding further to the gains, other income grew 4.48x YoY to stand at Rs4.02bn in 1Q2024 as compared to Rs898.28m in 1QCY23.
Other income also includes a dividend of Rs0.8bn received from Askari Bank Limited (AKBL).
The company’s finance cost shrunk 59.0% YoY and stood at Rs1.02bn as compared to Rs2.49bn in SPLY, mainly due to higher interest rates.
FFBL commended the management for proactively managing the working capital, leading to a substantial reduction in finance costs by Rs1.5bn as compared to SQLY.
The company paid a higher tax worth Rs3.89bn against the Rs339.88m paid in the corresponding period of last year, depicting a massive rise.
On a consolidated basis, the Group reported a profit after tax of Rs7.6bn, marking a significant improvement from a loss of Rs4.6bn in SQLY.
This upswing is primarily attributed to the first-quarter profit of the Parent Company (FFBL).
The improved financial performance of FFBL's joint venture (PMP) has also contributed to a profit after tax of Rs1.7bn in the consolidated results as compared to a loss of Rs1.8bn in SQLY.
Gas curtailment continues to be the biggest challenge for FFBL which has adversely affected Urea production as the company received 40% less gas than its allocated volume during the quarter.
"We strongly urge the Government to prioritize this sector for gas supply to avoid fertilizer shortage in the country and save scarce foreign exchange on import of Urea," it added.
As part of its business sustainability growth initiative, the Company is expanding its product portfolio by introducing Boron Fortified DAP to enhance yield, promote sustainable agriculture and strengthen the market share.
Going forward, the supply of allocated volumes of gas and its prIcing, DAP price trend in the international phosphate market, domestic DAP market size and stability of Pak Rupee against the US Dollar will remain critical for the Company's financial performance,
| Unconsolidated (un-audited) Financial Results for quarter ended March 31, 2024 (Rupees in '000) | |||
|---|---|---|---|
| Mar 24 | Mar 23 | % Change | |
| Sales | 46,523,738 | 31,522,701 | 47.59% |
| Cost of sales | (37,747,877) | (29,379,987) | 28.48% |
| Gross Profit/ (loss) | 8,775,861 | 2,142,714 | 309.57% |
| Administrative Expenses | (398,883) | (172,013) | 131.89% |
| Selling and distribution expenses | (2,392,731) | (686,542) | 248.52% |
| Exchange loss – net | (6,445) | (4,619,834) | -99.86% |
| Unwinding cost of GIDC payable | (59,338) | (162,632) | -63.51% |
| Other Income | 4,024,996 | 898,275 | 348.08% |
| Other Operating Expenses | (727,493) | (1,316) | 55180.62% |
| Finance Cost | (1,019,699) | (2,487,988) | -59.02% |
| Profit/ (loss) before taxation | 8,196,268 | (5,089,336) | -% |
| Taxation | (3,889,996) | (339,877) | 1044.53% |
| Net profit/ (loss) for the period | 4,306,272.00 | (5,429,213) | – |
| Basic earnings/ (loss) per share | 3.33 | -4.20 | – |
Amount in thousand except for EPS
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Posted on: 2024-04-25T15:05:57+05:00
