FFBL reports massive loss of Rs3.24bn in 1HCY23

July 21, 2023 (MLN): Fauji Fertilizer Bin Qasim Limited (PSX: FFBL) unveiled its profitability, wherein the loss after tax clocked in at 3.24 billion (LPS: Rs2.97), compared to a profit of Rs4.08bn (EPS: Rs3.14) in the same period last year (SPLY).

Going by the results, the company's top line grew by 1.02% YoY to Rs81.23bn as compared to Rs80.42bn in SPLY.

The cost of sales increased by 8.98% YoY, which worsened the gross profit by 26.89% YoY to Rs13.06bn in 1HCY23.

During the period under review, other income dipped by 34.06% YoY to stand at Rs3.2bn in 1HCY23 as compared to Rs4.85bn in SPLY.

On the expense side, the company observed a decrease in Distribution & selling costs by 17.24% YoY, while other expenses surged by 65.48% YoY to clock in at Rs1.17bn and Rs251.39m respectively during the review period.

The company’s finance costs skyrocketed by 2.27x YoY and stood at Rs7.12bn as compared to Rs3.13bn in 1HCY23, mainly due to higher interest rates and carryover of higher DAP inventory.

Due to huge volatility in the foreign exchange rate and non-availability of foreign exchange, the company suffered an exchange loss of Rs4.95bn.

On the tax front, the company paid a lower tax worth Rs2.51bn against the Rs5.98bn paid in the corresponding period of last year, depicting a decrease of 58.09% YoY.

The company continued to face economic and business headwinds throughout the period. Within the fertilizer sector, the company has been most severely hit by the economic crises since, contrary to the other fertilizer companies which secure raw material domestically, the company has to import its primary raw material, Phosphoric Acid.

It is worth noting that the LAT and gross profit include a loss of Rs2.5bn for six months period arising from the Government's GST policy which was discriminatory to domestic producers of DAP.

Amount in PKR Thousands

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