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FFC’s profitability jumps on higher offtakes

April 27, 2022 (MLN): Fauji Fertilizer Company (FFC) has unveiled its financial statement for the 1QCY22 today wherein the company reported a 43% YoY surge in net profits which stood at Rs8.5 billion as compared to the profit of Rs6bn in the same period last year (SPLY).

This translated into earnings per share (EPS) of the company which grew to Rs6.76 compared to EPS of Rs4.72 reported in the SPLY.

In conjunction with the results, the company announced an Interim Cash Dividend of Rs3.70 per share i.e., 37% for the period ended on March 31, 2022.

The improvement in the company’s profitability is attributed to increase in Urea offtake amid better retention prices, an increase in other income due to higher interest income on cash held by the company and dividend income from portfolio companies, and a lower effective tax rate.

During the quarter, FFC’s revenue improved by 26.7% while the cost of sales surged by 34% YoY which dragged the gross margins of the company to 36% compared to 39% in SPLY.

On the expenses front, the company observed an increase in administrative expenses and distribution costs by 10.3% while the other expenses inched up by 1.2% YoY to Rs529mn.

In addition, the financial cost of the company surged by 2.6x YoY to 1.28bn on the back of higher interest rates.

The company also booked a reversal of Rs529mn GIDC re-measurement gain on GIDC liability.

On the tax front, the company incurred an effective tax rate of 24% compared to 29% in 1QCY21.

FFC is expanding into power and offshore fertilizer complex. FFC has acquired a 30% stake in the 330MW coal mine mouth power plant of Thar Energy Limited (TEL). Moreover, FFC is planning to set up a 1.3mn ton fertilizer complex in Tanzania, a report by Foundation Securities noted.

Consolidated Profit and Loss Account for the Quarter ended March 31, 2022 ('000 Rupees)

 

Mar-22

Mar-21

% Change

Turnover-net

28,525,945

22,518,749

26.7%

Cost of sales

18,356,207

13,703,079

34.0%

Gross Profit

10,169,738

8,815,670

15.4%

Administrative expenses and distribution cost

2,357,997

2,138,396

10.3%

Finance cost

1,288,860

491,531

162.2%

Unwinding of remeasurement gain on GIDC liability

529,749

 

 

Other expenses

733,017

724,184

1.2%

Total expenses

4,909,623

3,354,111

46.4%

Other income

2,368,264

1,118,980

111.6%

Share of (loss)/profit of associates and joint venture

3,612,849

1,915,468

88.6%

Profit before taxation

11,241,228

8,496,007

32.3%

Provision of taxation

2,646,444

2,487,717

6.4%

Profit for the year

8,594,784

6,008,290

43.0%

Earnings per share – basic and diluted (Rupees)

6.76

4.72

43.2%

 

Copyright Mettis Link News

Posted on: 2022-04-27T13:21:47+05:00

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