January 29, 2019 (MLN): The Board of Directors of Fauji Fertilizer Bin Qasim Limited (FFBL) are scheduled to meet tomorrow for a review on the company’s financial earnings in CY18.
Going by the earning forecasts put forth by the following brokerage houses, we deduce that the market expects a decline in net income due to higher input costs, PKR depreciation and lower sales.
|
Brokerage House |
Earning in CY18 |
EPS CY18 |
Earning in 4QCY18 |
EPS 4QCY18 |
|---|---|---|---|---|
|
AKD Securities |
Rs.1.2 billion (+21.2%, YoY) |
Rs.1.3 |
Rs.1.4 billion (+10.8%, YoY) |
Rs.1.52 |
|
BIPL Securities |
Rs.928 million (-7%, YoY) |
Rs.1 |
Rs.1.1 billion (-11%, YoY) |
Rs.1.2 |
|
Taurus Securities |
Rs.769 million |
Rs.0.82 |
Rs.972 million (-24.1%, YoY) |
Rs.1.04 |
Analysts at BIPL Securities believe that the decline in cumulative earning will come about as a result of lower non-core income which is expected to fall by 41% YoY.
Ayesha Fayyaz at BIPL told Mettis Link News that this decline is a result of lower dividend income received from FFBL’s subsidiaries.
Meanwhile the profitability decline during the quarter in specific, has been attributed to the rise in input cost caused by a rise in the price of phosphoric acid in dollar terms, and a currency depreciation to top it off.
In addition to this, since DAP and urea offtakes dropped by 34% YoY and 25% YoY last quarter, its impact is expected to have pulled down FFBL’s topline by around 9% YoY, according to BIPL’s estimates.
Despite these statistics, AKD securities has projected a rise in profitability owing to the commencement of dividend income from Fauji Power Company Limited (Other income +63.7%YoY).
Mr. Hamza Kamal at AKD securities said that this is the first time when FFBL received dividend income from Fauji Power Limited, and that the inflow from this will be suffiecient to offset the impact of higher prices and lower sales.
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