October 25, 2023 (MLN): Fauji Fertilizer Company Limited (PSX: FFC) experienced a rise of 49.66% YoY in its profits, earning a profit after tax of Rs22.21 billion [EPS: Rs17.46] in 9MCY23, compared to a profit of Rs14.84bn [EPS: Rs11.67] in the same period last year (SPLY).
Meanwhile, the earnings in dollarized terms stood at $80 million compared to $75m in SPLY.
This achievement was attributable to various initiatives including the company's continued drive for cost economization and efficiency optimization, especially in view of persistently high rates of inflation, financial cost, and a weak rupee.
Along with the results, the company announced an interim cash dividend for the quarter ended September 30, 2023 at Rs3.98 per share, which was lower than industry expectations.
This is in addition to interim dividends already paid at Rs7.41 per share.
Going by the results, the company's top line inflated by 46.62% YoY to Rs116.09bn as compared to Rs79.18bn in SPLY.
The company's plant sites delivered urea output of 1,926 thousand tons, around 7% higher than last year mainly due to the improved reliability of our production facilities.
Higher production, favorable weather, and anticipation of an increase in urea selling prices due to an impending gas price increase resulted in a surge in sales volume to 1.91m tons.
It is worth noting that urea selling prices exhibited significant variation within the fertilizer industry, with FFC offering urea at lower selling prices by around Rs200/ Rs500 per bag compared to the market.
Sona urea prices towards the close of the period stood at around Rs3,200 per bag in contrast to international prices hovering around Rs7,200 per bag.
The cost of sales also rose by 45.81% YoY but was lesser than proportionate to sales increase, which improved the gross profit by 47.92% YoY to Rs44.88bn in 9MCY23.
During the review period, other income rose by 21.75% YoY to stand at Rs12.53bn in 9MCY23 as compared to Rs10.29bn in SPLY.
On the expense side, the company observed a rise in distribution cost by 26.08% YoY and other expenses by 57.14% YoY to clock in at Rs8.73bn and Rs3.57bn respectively during the review period.
The company’s finance costs expanded by 24.08% YoY and stood at Rs4bn as compared to Rs3.23bn in 9MCY23, mainly due to higher interest rates.
On the tax front, the company paid a higher tax worth Rs17.33bn against the Rs11.42bn paid in the corresponding period of last year, depicting a rise of 51.66% YoY.
| Unconsolidated (un-audited) Financial Results for Nine months ended 30 September, 2023 (Rupees in '000) | |||
|---|---|---|---|
| Sep 23 | Sep 22 | % Change | |
| Sales | 116,093,225 | 79,179,807 | 46.62% |
| Cost of sales | (71,212,769) | (48,839,767) | 45.81% |
| Gross Profit | 44,880,456 | 30,340,040 | 47.92% |
| Distribution cost | (8,726,626) | (6,921,760) | 26.08% |
| Other losses | (1,563,897) | (1,939,250) | -19.36% |
| Other Income | 12,525,883 | 10,288,448 | 21.75% |
| Other expenses | (3,571,626) | (2,272,892) | 57.14% |
| Finance cost | (4,004,797) | (3,227,567) | 24.08% |
| Profit before taxation | 39,539,393 | 26,267,019 | 50.53% |
| Taxation | (17,325,543) | (11,424,000) | 51.66% |
| Net profit for the period | 22,213,850 | 14,843,019 | 49.66% |
| Basic earnings/ (loss) per share | 17.46 | 11.67 | – |
Amount in thousand except for EPS
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Posted on: 2023-10-25T15:06:34+05:00
