Reports Rs3.8 earnings per share
Fauji Fertilizer Company Limited reported a net profit of Rs4.9 billion or Rs3.8 per share for the quarter ending June 2020.
The figures were down by 6% compared to the Rs5.2 billion or Rs4.1 per share profits it earned in the same period last year, the company’s financial results revealed on Monday.
The country’s chemical fertiliser producer saw its revenue decline by 12% to Rs23 billion in the quarter ending in June 2020 compared to the Rs26 billion for the same quarter last year.
FFC’s profit is according to the market expectations, but its revenue is lower.
“We anticipate the top-line (revenue) to decrease by 4% due to lower DAP volume,” said Taurus Securities Limited before announcement of the company’s financial results.
The decrease in FFC’s revenue can be attributed to the decline in the price of urea by 12% year on year despite the increase in sales of urea. The decline in urea’s price lead to lower revenues from its sales compared to last year. However, FFC’s sale of urea increased by 7% for first half of 2020 compared to the same period last year.
Finance cost of the company declined by 27% to Rs0.5 billion, compared to Rs0.6 billion for the same quarter last year. The decrease is due to lower borrowings by the company coupled with lower interest rates.
The market expectations were for other incomes of the company to decline. “Other income is expected to decline 27% year on year mainly due to the absence of dividends from Askari Bank Ltd and lower interest rates,” said Taurus Securities Limited.
However, FFC’s other income increased by 16% compared to last year despite low returns on Pakistan Investment Bonds due to lower interest rates.
“This can be attributed to dividends from AKBL and Pakistan Maroc Phosphore of around Rs1.4 billion,” said Sherman securities.
Following the result announcement, FFC’s share price appreciated by 0.8% to Rs111.9 from the previous day’s tally of Rs111 on Monday. The FFC stock did not outperform on Monday because the increase in share price was less as compared to an increase in the KSE-100 index by 1.6%.
FFC is a public company incorporated in Pakistan. The principal activity of the company is manufacturing, purchasing, and marketing of fertilisers and chemicals, including investment in other fertilisers, chemical, cement, energy generation, food processing and banking operations.