FFC reports a 36% growth in profits during 9MCY20 despite lower revenue

October 28, 2020 (MLN): Fauji Fertilizer Company has announced earnings of Rs. 18 billion (EPS: 18.17) for the nine months ended September 30, 2020, i.e. around 36% higher than the earnings reported in the same period of last year.

The company’s revenue fell by nearly 5% on account of a decline in the prices of Urea and Dap. However, a drop in the cost of sales by 11.3% owing to the removal of the GIDC levy on fuel and feed helped in lifting the gross profit by 9.4%.

Similarly, lower interest income from saving accounts as well as the absence of dividends from associate companies.

The finance cost declined by 17.7% due to the lower interest rate regime

The company paid an Interim Cash Dividend for the half-year ended September 30, 2020, at Rs. 2.55 per share i.e. 25.50%. This is in addition to the Interim Dividend already paid at Rs. 5.25 per share i.e. 52.5%.

The Board of Directors of the Company also approved submission of an Expression of Interest (EOI) for the acquisition of majority shares, in Foundation Wind Energy-l Limited and Foundation Wind Energy-ll Limited, collectively held by Fauji Fertilizer Bin Qasim Limited (FFBL) and Fauji Foundation.

The above-mentioned EOI will be followed by a detailed Due Diligence of the Targets and the acquisition, if determined feasible, will be subject to negotiation with existing majority shareholders, approvals of the Board, and Company Shareholders, procurement of requisite regulatory approvals and fulfillment of related customary conditions.

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